Biometric Cell Phones Coming – But US Will Be Last

Biometric technology has been around for more than a decade with little fanfare. However, interest is heating up for biometric security devices in communications. Iris scanners, voice recognition modules and fingerprint readers promise to raise the bar on locking down access to computers, networks, Web sites and even cell phones.

One of the hottest markets for biometrics is the mobile phone industry, where consumers abroad are already embracing its security and convenience. Industry watchers confirm that such advanced security devices are already popular in technology hungry countries in Asia and Europe.

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 two years to get their hands on such high-tech cell phones, which already are being introduced abroad.

US Cell Phone Industry Last

In a step for biometrics in the U.S., IBM in early 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.

“We are seeing a tremendous customer response to the fingerprint,” 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.

Steve Mansfield, vice president of marketing with AuthenTec, told TechNewsWorld that 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 Electronics and Fujitsu. The company is in various phases of development with every other major cell phone manufacturer.

“The new biometric technology is pretty remarkable. But 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.”

According to Mansfield, five cell phone models with fingerprint sensors are already in the Japanese marketplace. South Korea’s LG Electronics introduced two biometric security models in September.

Marketing Strategies Differ

Mansfield estimates that new biometric features will be built into mobile phones in China during the first half of next year. These same features will hit the European market during the second half of 2005.

“The U.S. will see those same features by the end of 2006,” he told TechNewsWorld.

The reason for the lag time is a difference in marketing strategy in the U.S. In other countries, many cell phone manufacturers begin to move up the food chain. According to Mansfield, mobile phone makers do this by using new features to increase product sales.

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., service providers sell the phones with the features the provider wants to offer. This tends to limit the competition for new features. This limited competition results in fewer choices for U.S. consumers, Mansfield suggested.

Usage History

The growth of the cell phone market followed five steps. Early adoption was based solely on voice-centric functions. Consumers used their cell phones for voice communication as an extension of their wired phones.

The next advancement came with feature-centric phones. An example of this is phones capable of text messaging. Some analysts suggest that the text messaging craze by youthful consumers is driving the sales of cell phones in the U.S.

Smart phones brought new features. These involved the convenience that accessing e-mail and Web sites for information and e-commerce brought to consumers.

One of the newest innovations in the U.S. market is the multimedia phone. This allows consumers to acquire and play music in MP3 format. It also provides access to streaming video and remote gaming services.

The latest phase is the one not yet available to U.S. consumers. It is the convergence of the multimedia and the smart phone. This is the area in which biometric devices will bring ever expanding new uses to the cell phone.

Security Issues

“Biometrics in much more convenient than PIN security. And convenience is what sells biometrics in phones,” Mansfield told TechNewsWorld.

He said one of the biggest surprises domestic service providers found is that interest in cell phone security is strong among mainstream consumers, not just enterprise accounts. Service providers are starting to give more value-added services. Security issues in cell phones are now becoming a top priority.

“Consumers have been the largest adopter of wireless technology and are readily adopting biometric devices,” Mansfield said.

Future Offerings

Mansfield says he is certain that fingerprint sensors will be central in new phone offerings. Consumers will need this new approach to security to handle the high-speed access that cell phones will provide.

Cell phones will act as debit and credit devices. The practice of swiping an ATM card or a credit card at the supermarket is already established. Putting that same technology into a cell phone’s SIM card is the next logical step.

Mansfield said there is evidence of that trend already developing in foreign markets. In Japan, workers use cell phones for keyless entry. Train stations have devices that read the cell phone data chip to make a ticket purchase, rather than using a debit card.

In South Korea, consumers are able to conduct online banking transactions from their mobile phones much the way they do from their desktop computers.

M-Commerce from cell phones will be one of the next big advancements in consumer convenience, according to Mansfield. Consumers will not only be able to order tickets and make seat selections with their cell phones; they will download the ticket into their cell phone’s memory and use that data to enter the theater.

“A lot of cool things will be happening,” Mansfield said.

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  • For those interested in biometrics, please note that NY-based tech analysts ABI Research will be launching a new report on the subject, including the areas discussed in the article, within the coming week. For more info, call 516-624-2500.

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