iOS 8 privacy changes bring big layoffs to retail tracking startup

iOS8

iOS 8 is cruising through the final stages of development ahead of its fall release, and while most users can’t wait for its arrival, one NY-based startup already had to cut a third of its staff, after privacy changes in iOS 8 have threatened to already make its retail tracking technology obsolete.

Nomi, a startup that creates solutions for retail stores to track shoppers and their spending habits, has laid off 20 of its 60 or so employees, thanks in part to some small changes in iOS 8 that make make it impossible to identify repeat visits from shoppers with an iPhone.

After raising $13 million in venture capital, Recode reports Nomi has had to backtrack on its efforts to track returning customers by storing their phone’s MAC address to determine repeated visits.

Before iOS 8, Nomi sold a service that let stores track how many shoppers visit a store, which sections they spend time in, as well as how often they return, by storing each iPhone’s MAC address. Starting in iOS 8, iPhones will broadcast a random MAC address when searching for nearby Wi-Fi networks, making it impossible for companies like Nomi to tell when the same device comes back to the store.

Nomi’s CEO says Apple has “basically said that they don’t like this method of tracking” and that “beacons are the way that they want this to be done,” so the company has already started to rollout more iBeacon solutions to retailers.

The transition to beacon installations requires less time and resources that Wi-Fi installations did, which Nomi says is part of the reason it had to cut staff in July after it had a large backlog of store installations to be completed.

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Buster HeinBuster Hein is Cult of Mac's Senior News Editor and lives in Phoenix, Arizona. Twitter: @bst3r.

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