Mobile Commerce

Booming Biometrics Market Fueling More Players

Despite some chatter in the payments industry that fingerprint biometrics are a passing trend, one Swedish company is making the case for the market.

Reuters reported that the company Fingerprint Cards (FPC) has experienced a massive demand increase once it began outfitting China’s Huawei smartphone with its fingerprint sensors. In fact, in 2015 alone, its shares have jumped more than 1,000 percent.

Clearly, the market for biometrics in smartphones, tablets and credit cards has taken off. The seamless process of logging in with fingerprint biometrics — such as for online banking apps — has become a trend that’s catching on simply because it’s faster than typing in a password.

Plus, users can’t forget their fingerprint.

Now, with its growing client base, FPC has carved out its own niche in the growing sector. But its rivals want a piece of the biometrics pie, too. As the Reuters piece points out, companies like Synaptics are looking to secure more share in the market with major clients like Samsung. And they aren’t the only players, of course.

“They have a window now as they deliver because competitors have not yet caught up with them, but the market always does in the end,” Gustav Sjogren, fund manager at Norron Asset Management, told Reuters. “There will of course be increased competition and price pressure here as well.”

What did help FPC gain market share quickly was its early emergence into the market.

“FPC was early out with a good touch sensor technology. When Apple bought AuthenTec and later launched its iPhone with a touch sensor in 2013, FPC made a strategic decision to focus on the touch sensor technology,” Carnegie analyst Havard Nilsson told Reuters.

As for sales, FPC projects that its sale will continue to grow around 1,000 percent to nearly $294 million in 2015 alone (2.5 billion Swedish crowns). But as the value of its shares jump, that has investors weary of its actual valuation, with some even staying clear because it’s believed to be too high.

“We have chosen not to invest in Fingerprint as we think the valuation is way too high,” said Sjogren said in the interview. “To think they can keep such a market share, that just about never happens, I have experienced that so many times before.”

Still, FPC remains bullish about its ability to scale its market share in the next year, continue increasing in value, and continue to fend off its rivals.

“First they need to catch us, and then they need to afford to invest in order to be bigger than us. That’s a challenge when you are not making money,” FPC CEO Jorgen Lantto told Reuters.

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