Apple's AirTag relies on a feature no competitor can match: One billion iPhones

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AAPLApple AirtagSource: Apple Inc.

On Tuesday, Apple announced a long-awaited gadget called AirTag. Users can attach the $29 coin-sized device to valuables like keys or a backpack, then locate it on a live map inside Apple’s built-in Find My software.

AirTag competes with a number of other products on the market, including from Tile, whose general counsel complained before Congress on Wednesday about Apple’s overall dominance.

But AirTag’s most important differentiating feature isn’t the technology inside the $29 coin-sized stainless steel gadget. It’s other people’s iPhones.

AirTag doesn’t have a GPS signal, which would rapidly drain its battery and raise privacy questions. Instead, when it’s attached to a lost object, it sends out scrambled Bluetooth signals. For those signals to reach the reach the internet and inform the person who’s looking for their lost device, they’ll need to find an iPhone that’s listening for them.

Using Bluetooth and the hundreds of millions of iOS, iPadOS, and macOS devices in active use around the world, the user can locate a missing device even if it can’t connect to a Wi-Fi or cellular network,” Apple explained in a security disclosure about the Find My service. “Any iOS, iPadOS, or macOS device with ‘offline finding’ enabled in Find My settings can act as a ‘finder device.”

The product represents a new frontier for Apple: Using its install base of over 1 billion iPhones as infrastructure to build services that its competitors can’t. Now iPhones are part of a physical network out in the world that’s looking out for stolen goods — even if their users have never purchased an AirTag.

“The bottom line is AirTag is an example of Apple leveraging its ecosystem to create a more compelling product than what is currently in the market,” Loup Ventures founder Gene Munster wrote in a newsletter on Tuesday. “Specifically, AirTag will have better navigation and discovery features, along with a billion-plus device network that can be utilized to help locate lost items.”

Enrolling in the Find My network does have benefits to iPhone users who don’t buy AirTags. Many users sign up because the same app can be used to