By Richard E. Norton, International Biometrics Advocacy
Association (IBIA)
In January of 2002, the IBIA examined where the biometric industry
stood at the end of 2001 and concluded that the companies that produce
biometric devices and software were on track with earlier revenue forecasts.
We noted that these core firms had weathered tough economic times, and
were ready to respond to the new demand for biometric components by
industry and government as both sectors responded to the events of September
11 and accelerated their security programs. Noting the forceful stimuli
of encouraging legislation and favorable perceptions, IBIA predicted
that revenues at the manufacturer and developer level would rise from
just under $200 million now* to $1 billion by 2004, and $2 billion by
2006.
Is this a finger-in-the-wind estimate, or is there actually a methodology
to our madness? Clearly there has to be more behind the numbers than
mere extrapolation of the effects of U.S. legislation and public opinion.
In this article, we'll take a closer look at where those projections
came from and what specific areas of growth — in terms of both
geography and application — will drive the expansion of the market.
As was observed in January, many biometric products are ready for deployment,
particularly as enhancements to physical security applications. Earlier
impediments to prime-time adoption — cost, lack of standardization,
scalability, and real-world results — had been resolved to a large
extent. Market conditions were also promising; revenue forecasts for
2001 had held up, and checkbooks were starting to open for biometric
applications that were not limited to government physical access solutions.
With these circumstances forming the baseline, we looked at other factors
that would either directly influence market growth, or would serve as
credible analogs that may help to predict the trajectory for biometric
products. These included:
A snapshot of where biometric applications were being used showed that
physical access control — protecting buildings and rooms from unauthorized
entry — was credited with roughly half of sales in 2001. Logical
access control — protecting computers and networks — represented
40 percent of the market, and time and attendance applications accounted
for the remainder.
Our projections reveal a markedly different situation in 2006. The
migration to self-contained biometric devices will be a key market factor
over the next four years, creating a broad new telecommunications category
that includes any implementation of biometrics in units that use radio
frequencies to signal the identity of the bearer. The outstanding feature
of this category is that it reflects a break from the current paradigm
that calls for a biometric template to be stored in a database, and
sets up an architecture that allows both the biometric and its enveloping
device — think of a very smart key fob, or multifunctional mobile
communicator — to evolve seamlessly as technology changes.
While this new market for biometrics is good news for the industry,
it is not bad news for other applications. Physical access control,
for example, "shrinks" from half of the market to a quarter
of the market, but revenues grow from $85 million in 2001 to $550 million
in 2006. Similarly, logical access control expands from $66 million
now to $242 million by 2006. We also envision the emergence of a new
automotive category that covers a range of products from automating
operator tasks to locking out unauthorized users.
The final key characteristic of the market four years hence will be
its geographic diversity. At the end of 2001, North America accounted
for 75 percent of sales and Europe about 12 percent. By 2006, strong
growth in the Asia-Pacific region will raise its current market share
of 9 percent to 32 percent — roughly equal to the $700 million
North American market, and well ahead of the European market, estimated
at $544 million.
Only time will tell how accurate our crystal ball is. The next 18 months
will be critical, as major questions are answered about the extent and
manner in which biometrics will be used for new government-driven initiatives,
and about how promising research on new technologies will be converted
into market-ready products. As we noted in our January assessment, the
operative word for biometrics is no longer "if" but "how."
Under these optimistic circumstances, we believe the path to growth
may take some unexpected turns, but biometrics are certain to be a common
feature of everyday tools much sooner than we predicted just a year
ago.
* Projections do not reflect revenues of integrators who deploy biometric
technologies, nor the cost to end users who purchase biometric solutions.
The estimates are primarily for biometric verification applications,
and do not include the public sector market for solutions built around
the Automated Fingerprint Identification System (AFIS) standards.