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Acquiring Biometric Industry Competitive Intelligence In North America:

A Guide For Fingerprint-Scan Vendors

By Michelle Shen
ePolymath.com

July 29, 2002

Biometric security was a $399-million-revenue industry as of the year 2000*, and is expected to grow to $1.9 billion by year 2005 thanks to the increasing concern about security since 9/11 and the rapid growth in Internet transaction activities. The use of biometric technology is expanding rapidly, entering an increasing number of physical security (door, buildings) and logical security (PCs, networks) applications. Fingerprint-scanning continues to be the leading biometric technology in terms of market share, commanding nearly 50 percent of non-AFIS (automated fingerprint imaging system) biometric revenue.
Major players in the biometric security industry can be divided into three areas: Major sensor suppliers, major solution suppliers, and major resellers/distributors. Major sensor suppliers are those who manufacture fingerprint optical and silicon sensors and incorporate them into ready-to-develop chipsets. Major solution suppliers are those who incorporate fingerprint sensors to develop functional modules from a software development kit (SDK), and customize solutions according to different customer requirements. Major resellers and distributors are those who resell, distribute, and market sensors, solutions, and technical support to the end users. However, the division among these three roles has become very vague due to the industry consolidation and technology integration.

Competitive intelligence is the creation of an intelligence system that helps management access their competition and their vendors in order to become more efficient and effective competitors. The main purpose of this article is to help biometric (fingerprint-scan, specifically) market players understand what their competitors are doing and develop strategies to achieve competitive advantage.

The fingerprint-scan major players are chosen according to their sales revenue, brand awareness, and scope of activities (Table 1). Of the five major players outlined in this article, all of them have proprietary technologies based on the basic fingerprint algorithms. Due to the sufficient funding and venture capital, they are all able to keep strong developer groups to keep up with the accelerating process of technology commercialization. Major players also have strong channel partners (like system integrators, VARs, OEMs, or simply channel partners like resellers/distributors) to facilitate their logistics. Existing resellers/distributors are well established, have intimate relationships with major suppliers, and have a strong customer base (Table 2).

The Chinese symbol Wei-Ji symbolizes the seemingly opposite situations of crisis/danger and opportunity as one and the same thing. Each crisis/danger contains the seed of a fresh opportunity; it is up to the individual to decide which it is. In the business world, where there is crisis/danger, there is also opportunity. Growing market size, more and more security awareness, and more aggressive online sales channels are the opportunities; more and more new entrants and less confidence in venture capital investments are the threats/crises. Acquiring competitive intelligence will help market players achieve a more sustained growth path.