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Biometric Cell Phones on Slow Track to US Market

By Jack M. Germain
Dec 25, 2004 1:30 AM PT

Renewed interest in biometric security is heating up the cell phone industry in Asia. Industry watchers report that advanced security devices using biometrics are already popular in technology hungry countries in Asia and Europe.

Biometric Cell Phones on Slow Track to US Market

However, new biometric products already available to businesses and consumers are lagging behind in the U.S. marketplace. That will not change until American enterprise IT managers and consumers learn enough about the benefits of biometrics to demand the new products.

Some analysts predict that today's US$285 million biometrics market in Asia and the Pacific Rim will grow to nearly $431 million by the end of next year. The forecast for biometric devices worldwide is even rosier. Revenues for biometrics worldwide could sprout from $1.2 billion in 2004 to $4.6 billion in 2008.

U.S. consumers, however, will have to wait up to two years before getting their hands on high-tech cell phones already being introduced abroad.

Consumer Options Differ

One big reason for the delay in biometric cell phones reaching U.S. consumers sooner is marketing strategy. In other countries, many cell phone manufacturers are anxious to expand product lines to attract more customers.

In foreign markets cell phone manufacturers sell directly to consumers. Thus, the push for new services comes from the base of phone-feature users. In the U.S., however, service providers sell the phones with the features the provider wants to offer.

This tends to limit the competition for new features in the U.S. Such limited competition results in fewer choices for U.S. consumers.

It is essentially a business consideration. According to former marketing consultant Shoieb Yunus, manufacturers are a bit apprehensive about trusting the American marketplace with new technology that is not first proved successful in the work place.

Bad First Impressions

One of the biggest reasons cell phone makers are withholding these products is an inherent bad rap associated with fingerprinting carrying over to biometric fingerprinting, EZValidation founder Shoieb Yunus told TechNewsWorld. EZValidation is a biometrics and security software provider.

One of the hottest applications for cell phones in the European and Asian market is an embedded fingerprint reader. However, earlier efforts to introduce fingerprint scanners for user identification at computer work stations met with dismal failure, Yunus said.

As a result, the biometrics market in the U.S. has been very slow to gain acceptance compared to foreign markets.

For that reason, cell phone manufacturers are reluctant to offer the technology to the U.S. market too quickly, Yunus said.

"People in this country still associate fingerprinting as an application involving criminal activity," he said.

Maybe a New Start

That attitude might be about to change, other analysts say. According to Steve Mansfield, vice president of marketing with AuthenTec, fingerprint scanners are one of the fastest growing segments in the cell phone industry. His company is one of the leading providers of fingerprint sensors to the global wireless market.

Authentec provides fingerprint-enabled mobile phone security for top-selling phones by LG and Fujitsu. The company is in various phases of development with every other major cell phone manufacture.

Mansfield said five cell phone models with fingerprint sensors are already in the Japanese marketplace. South Korea's LG Electronics introduced two biometric security models in October.

"We are seeing a tremendous customer response to the fingerprint [technology]," IBM's Clane Anderson told TechNewsWorld. "We expect consumer pressure on other manufacturers to make the fingerprint reader a standard security device in all new computers." Anderson is IBM's program director for security and wireless devices in the Personal Computing Division.

Two factors might be signaling a change for U.S. consumers. IBM in October introduced a fingerprint scanner tied to a security chip in its ThinkPad T42. Company officials said consumer interest in this country is very strong.

Microsoft for the last few years has been mouthing support for upcoming biometrics devices in its operating systems. With more than just lip service, Microsoft's influence could attract American consumers to join the biometric convergence.

"The new biometric technology is pretty remarkable. However, when it comes to the wireless marketing space, new technology goes first to Japan, then Korea and Europe," Mansfield said. "U.S. consumers get the new stuff last."

Education First

Before any headway is made in getting business and home users to adopt biometric devices in cell phones, consumers have to be educated about the benefits.

"In my view, end user education is the key issue. The price of the sensor has come down tremendously. But people first have to see a reason for buying new technology," Yunus said.

Yunus has 15 years of technology, product management, marketing and business development experience. He has successfully defined, positioned and launched OEM and retail products in domestic and international markets.

Yunus said his conversations with many solutions providers convinced him that marketers first have to create an environment in the U.S. that will be receptive to the new products.

"IT managers and enterprise workers are not aware of the benefits of biometrics in cell phones. That has to happen before anything will be available to U.S. consumers," he told TechNewsWorld.

"Enterprise workers and the mobile space will be the first adopters in the U.S. After that, the products will trickle down to consumers," Yunus said.


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