HIP, cool and narcissistic, the 20-something leaps from bed into his suit trousers. His wall is plastered with pictures of him holding up his right index finger. There’s even a close-up just of the finger. The 20-second TV commercial bounces along to a new retro of “It Don’t Mean a Thing (If It Ain’t Got That Swing)”. The hero wolfs down breakfast, skims the newspaper, pecks the computer, shakes hands on a deal, shops, slurps ice cream and quaffs afternoon coffee, unimpeded by his perpetually upright finger. In the last frame, his mobile rings and he swipes his digit through a slot on the keypad. His fingerprint pops up on the screen and—presto-digitation!—he’s talking.
If slick TV commercials a market made, dozens of defunct dot-coms would not be rotting in the boneyard of dumb ideas. If this one Korean TV commercial for fingerprint-enabled mobile phones from LG TeleCom were the only evidence that the fingerprint-sensing market is gaining momentum, we would be as sceptical as we were last time. We’re not. Broader adoption is still a couple of years away, but the signs look good.
The Korean commercial is not the only evidence that the market is moving. Most major laptop makers offer a fingerprint option, and all major Japanese and Korean cell phone companies will offer one by the end of 2005. The price of sensor semiconductors is dropping, and vendors now sell entire integrated platforms: client piece, server and management software. There is even a new VC fund devoted entirely to biometrics.
“In the last six to 12 months, business has picked up. People are getting customers,” says C. Maxine Most, principal of Acuity Marketing Intelligence and editor of a newsletter on the biometrics market.
Since late 2004, most major PC makers have rolled out fingerprint-sensing options: IBM in October, followed by Toshiba, Fujitsu-Siemens and Hewlett-Packard in 2005.
“Twelve months ago, none of the Tier 1 notebook manufacturers offered fingerprint security integrated into a notebook,” says Alan Kramer, CEO of Upek, which spun off from STMicroelectronics in March 2004. In the past 12 months, Upek has shipped more than one million fingerprint sensors for IBM, MPC, Gateway, Samsung and other laptops, he says.
“Since the launch of the T42 [ThinkPad] with an integrated fingerprint reader, in October 2004, we have seen a significant increase in customer demand for this feature,” an IBM spokesperson says.
As a result, IBM quickly integrated the fingerprint reader as an option into its entire line of laptops and tablets in addition to a keyboard with the integrated fingerprint reader and a USB cable-attached reader, he says.
Even Microsoft jumped on the bandwagon, offering an optical sensor (not silicon-based like the others) on peripherals. “Dell and Compaq are the only major ones not doing anything yet,” says Sapna Capoor, an analyst at market research firm Frost & Sullivan.
Scott Moody, CEO of AuthenTec, a seven-year-old fabless semiconductor startup, agrees. In August, the company shipped its five millionth fingerprint-sensing chip-3.5 million for mobiles and 1.5 million for laptops. Fujitsu, providing a chip for NTT DoCoMo, was the first Japanese company to offer it on a mobile; LG was the first in Korea.
“At least five other [mobile] phone companies will introduce this technology by the end of the year,” Moody says. “I would not be surprised to see it on high-end mobiles in the US next year.”
In laptops, AuthenTec also partners with HP and others.
Combating identity theft
There is broad agreement on what is driving the market now: The price of the client device has dropped (with an incremental cost as low as US$5, says Moody), and every time the press reports another case of identify theft, general interest rises. In most cases, fingerprint sensing is being used to replace passwords and smart cards or to work in conjunction with them.
In short, business needs are finally demanding applications. Most thinks it speaks volumes about the market’s maturation that Robert LaPenta, an experienced defence industry executive, recently launched a VC firm, L-1 Investment Partners, to fund biometric companies.
Overall awareness is growing, too. Capoor points out that a few grocery chains in the eastern US offer a fingerprint-accessed checkout system that bills whatever credit card is registered. And the ads’ importance should not be underestimated. “They do a lot for awareness levels,” Capoor says.
Moody says the phone in the LG TV commercial has many advanced capabilities, including camera, MP3 player and GPS, but the entire ad touts fingerprint recognition.
“It is promoting security as something cool,” says Moody, which means that LG TeleCom may have its finger on the pulse of the upwardly mobile young.
5-Oct-2005
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