F&S study: European biometrics ID market ready to rumble

A recent study by marketing consulting company Frost & Sullivan aims to project and track the evolution of the market, as well as how consumer attitudes in Europe will change.

But though the picture may look rosy, the author of the study also cautions that some factors may impede the biometric ID market. These issues mainly revolve around the technology and its practical application, and its ability to be widely accepted.

The market is just beginning to open up as biometric devices become more universally established and public awareness about the technology's benefits rises. Chris Cherrington, author of Frost & Sullivan's latest study, points out: "The evolution of biometric solutions is increasingly evident throughout Europe. The next few years will be indicative of the pace of conversion of manual processes to those driven by biometric devices."

Encouragingly, sales of biometric devices across Europe amassed $32.8 million in 1999 and will swell to $158.9 million by the end of the study period in 2006.

High costs and failure rates have traditionally been hampering the acceleration of biometrics implementation.

However, the growing fear of fraud, intensified by the explosion in e-commerce usage and the advent of m-commerce, is a main driver fuelling growth in the overall European biometric identification market.

The threat of identity theft, coupled with the exponential growth of e-business across Europe, helps galvanise the necessity for remote authentication and identification verification.

Biometry sales will be energised by the recent agreement on a standard Application Programming Interface (API), enabling software developers to incorporate biometric products into other packages.

Frost & Sullivan's survey states that the complementary technologies, in particular smart cards and mobile telecommunications, hold the key to the biometrics market. Strong potential resides in these and other complementary markets.

Cherrington says: "The main obstacle for biometrics vendors is the translation of the demand for the final service into the requirement for biometry as the 'enablement' technology to achieve their main objectives, i.e. reduced administration costs and increased security."

If this can be achieved, the demand for biometric solutions will comfortably outstrip the ability of the current vendor population to supply.

Bill Gates has "endorsed" biometrics, by referring to the technology as a security solution in a recent speech. Microsoft's announcement that the company' s future software packages will include an interface for biometric products will help combat the current level of scepticism, Chris Cherrington believes.

The star performer in the overall European biometrics ID market is the fingerprint sector.

The fingerprint chip device market, in particular, is expected to shine. This can be ascribed to fingerprints offering one of the most marketable biometrics solutions.

The fingerprint sector provides a barometer of the overall acceptance of biometrics by both the general public and by secondary device manufacturers. Fingerprint biochips are expected to improve their performance and further reduce their power requirements.

By the end of the forecast period in 2006, the fingerprint will account for nearly half of total sales in the biometric ID market, with voice authentication ranking in second position.

The dominant application area in the year 2006 will be authentication, physical access control and surveillance & monitoring.

Frost & Sullivan expect the early market to be influenced by those vendors with a link into the mobile phones market. Sony and Infineon will be taking the mindshare in this space and open the market to other companies.

Thereafter, Frost & Sullivan's study expects to see a spate of alliances and the development of a very volatile market, characterised by merger and acquisition activity.