Bluetooth beacons are hardware transmitters (a class of Bluetooth Low Energy (LE) devices) that broadcast their identifier to nearby portable electronic devices. The technology enables smartphones, tablets and other devices to perform actions when in close proximity to a beacon.

Bluetooth beacons use Bluetooth Low Energy proximity sensing to transmit a universally unique identifier picked up by a compatible app or operating system. The identifier and several bytes sent with it can be used to determine the device's physical location, track customers, or trigger a location-based action on the device such as a check-in on social media or a push notification.

One application is distributing messages at a specific point of interest, for example a store, a bus stop, a room or a more specific location like a piece of furniture or a vending machine. This is similar to previously used geopush technology based on GPS, but with a much reduced impact on battery life and much extended precision.

Another application is an indoor positioning system, which helps smartphones determine their approximate location or context. With the help of a Bluetooth beacon, a smartphone's software can find its approximate location in a store. Brick and mortar retail stores use the beacons for mobile commerce, offering customers special deals through mobile marketing, and can enable mobile payments through point of sale systems.

Bluetooth beacons differ from some other location-based technologies as the broadcasting device (beacon) is only a 1-way transmitter to the receiving smartphone or receiving device, and necessitates a specific app installed on the device to interact with the beacons. Thus only the installed app, and not the Bluetooth beacon transmitter, can track users.

Bluetooth beacon transmitters come in a variety of form factors, including small coin cell devices, USB sticks, and generic Bluetooth 4.0 capable USB dongles.

The development of the "short-link" radio technology, later named Bluetooth, was initiated in 1989 by Dr. Nils Rydbeck CTO at Ericsson Mobile in Lund and Dr. Johan Ullman. The purpose was to develop wireless headsets, according to two inventions by Johan Ullman, SE 8902098–6, issued 1989-06-12 and SE 9202239, issued 1992-07-24. Since its creation the Bluetooth standard has gone through many generations each adding different features. Bluetooth 1.2 allowed for faster speed up to ≈700 kbit/s. Bluetooth 2.0 improved on this for speeds up to 3 Mbit/s. Bluetooth 2.1 improved device pairing speed and security. Bluetooth 3.0 again improved transfer speed up to 24 Mbit/s. In 2010 Bluetooth 4.0 (Low Energy) was released with its main focus being reduced power consumption. Before Bluetooth 4.0 the majority of connections using Bluetooth were two way, both devices listen and talk to each other. Although this two way communication is still possible with Bluetooth 4.0, one way communication is also possible. This one way communication allows a bluetooth device to transmit information but not listen for it. These one way "beacons" do not require a paired connection like previous Bluetooth devices so they have new useful applications.

Bluetooth beacons operate using the more power efficient Bluetooth 4.0 Low Energy standard so battery-powered devices are possible. Battery life of devices varies depending on manufacturer. Several chipsets makers, including Texas Instruments and Nordic Semiconductor now supply chipsets optimized for iBeacon use. Power consumption depends on iBeacon configuration parameters of advertising interval and transmit power. Battery life can range between 1–48 months. Apple's recommended setting of 100 ms advertising interval with a coin cell battery provides for 1–3 months of life, which increases to 2–3 years as advertising interval is increased to 900 ms.