International Herald Tribune

Unlocking market for fingerprint scanners

July 28, 2003
By Trung Latieule

PARIS Biometrics, which measures unique biological traits for the purpose of identification, gained more attention after the attacks of Sept. 11, 2001, in the United States showed the potentially catastrophic consequences of lapses in security.

Since then, fingerprint recognition has emerged as one of the most popular and convenient biometric technologies: It is more accurate than voice recognition and cheaper than iris scanning, supporters say. Now, more and more everyday gadgets are coming equipped with fingerprint scanners.

NTT Docomo, a leading Japanese mobile communications company, has just unveiled its first mobile phone with a built-in fingerprint scanner, the F505i. Samsung Electronics introduced the first Centrino-based laptop, the X10, with fingerprint authentication. And Hewlett-Packard last year showed off the first handheld computer, the iPaq H5450, with a finger scanner. The feature adds about E100, or $114, to the price of the devices.

The technology is quite fast and easy to use. You just place your finger onto the sensor that will read your biometric information and validate it against the stored profile. If it is a match, the scanner will grant you access to the device.

"We're seeing the market beginning to take off now," said Scott Moody, president and chief executive of Authentec, a leading manufacturer of fingerprint semiconductor products based in Melbourne, Florida. "If the economy was better, it would be faster."

Authentec sold 80,000 fingerprint readers in 2001 and 200,000 in 2002. Moody expects sales of more than 1 million units this year. Last year, finger-scan technology was a $144.2 million market, according to International Biometric Group, a New York consulting firm.

Trevor Prout, IBG marketing director, said growth was being fueled in part by the increasing numbers of people accessing their office networks from mobile phones and PDAs.

"A lot of organizations look at it as the remote access to their corporate networks being the most sensitive, because that's the entry point they are the least able to control," Prout said.

Biometrics also offers the advantage of reducing technical support costs. Many calls to the help desk are to retrieve or reset passwords. With biometrics, it is who you are and not what you know that matters.

Government and businesses were the main buyers of biometric devices in 2002, according to IBG. Consumers only accounted for about 3 percent of the market, but IBG forecasts that to grow to about 16 percent in 2007.

Others are skeptical. Nick Jones, a vice president in Britain for the U.S. consultancy Gartner Inc., questioned consumers' interest.

"Corporations would be prepared to pay because they know the cost for security fault," he said, "whereas consumers, at the moment, don't have anything very dangerous that they would wish to be protected on their phones."

Price cuts have a lot to do with the increasing rate of adoption. Most fingerprint readers sold separately from the devices cost $99 to $149. But Moody predicted prices would drop to under $50 by the end of the year.

Besides cost, convenience is contributing to the growth of the biometrics market. "The grand slam in biometrics," Moody said, "although most of the debate has been around security, is as much about convenience and individual personal security as anything."

Jones noted that more people are storing photos on their mobile phones. "The phone is becoming a photo album, not a transmitting device," he said. "If people start having hundreds of pictures on their phone, some of which may be a bit private, maybe they might be interested in security then."

Yet many people still associate fingerprinting with criminality. And, Jones pointed out, many still do not use passwords on their cell phones or virus-checking on their PCs.

Although the United States is the predominant market today, Moody sees Asia as the biggest in the next two years because it is so gadget-oriented. In addition, third-generation mobile phone networks, with their high data-transmission speeds, would make access to company networks more convenient - and therefore more likely to be protected.

Chris Christiansen, an analyst at International Data Corp. in Framingham, Massachusetts, however, expects the European market to grow most.

"European operators are far more concerned about theft of services, customer fraud, and attacks on their networks," he said. "Moreover, Europe is far more ahead of the U.S. in data and transactional services."

In the end, the value of integrating finger scanning into a phone or laptop may not be to the consumer. "The real benefit," Christiansen said, "would be to the operator by reducing fraud, theft of services, and misuse of the network."