iBeacon is an indoor positioning system — think GPS, but inside buildings, stores, parks, etc. — that are designed to be low cost and ultra-low power and work with iOS 7) devices to provide directional, informational, and other services. Tied into Apple's existing Location Services like GPS, Wi-Fi mapping, and cell tower triangulation, iBeacon can detect when you approach or leave, and estimate your proximity. It can also be disabled in Settings: Privacy should you not want to make use of it.
Examples of potential iBeacon services include describing products to shoppers on shelves, or alerting them to deals via push notification, guiding a hiker through a mountain trail, even if they have little or no vision, or helping a visitor find parking and get to the right office for a scheduled meeting. iBeacons are currently deployed in U.S. retail stores, as well as sports facilities and grocery stores.