These companies are about to strike it rich thanks to the iPhone’s fingerprint sensor

Fingerprint sensors could become ubiquitous… but maybe not this ubiquitous.
Fingerprint sensors could become ubiquitous… but maybe not this ubiquitous.
Image: Reuters/Mike Segar
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Smartphones existed long before Apple got into the picture, with classics like Nokia’s foldout Communicator and Sony’s touchscreen P800. But the iPhone, released in 2007, made smartphones friendly, intuitive and elegant. The same is true of fingerprint sensors on smartphones, the highlight feature of the new iPhone 5s released by Apple in September. They too have been around forever—or at least since the year 2000, when Sagem incorporated a sensor on an old-fashioned 2G phone (link in Russian). But the sleek incorporation of the technology by Apple has given other makers a template to work from.

A new report from IHS, a research firm, makes clear just how much Apple has spurred the industry. The number of smartphones shipping with fingerprint sensors will rise from 46 million this year to 525 million by 2017, the report says. According to the same company’s estimates of smartphones shipped globally that year, that means fingerprint sensors will be found in one of every three devices: not quite mainstream but not a novelty either.

Only four companies of any scale operate in this industry. AuthenTec was acquired by Apple  in July last year for $356 million. Its technology is now used in the iPhone 5s. Another, Validity, was picked up last month by Synaptics, a company that makes the hardware that users interact with: touchpads, touchscreens, scroll wheels, that sort of thing.

That leaves two more firms ripe for the picking. The first is Fingerprint Cards, a Swedish company that was at the centre of an elaborate hoax last month when its PR distributor let through a fake press release announcing its sale to Samsung for $650 million, well above its market cap of $420 million. The speed with which investors bought the stock showed just how believable the hoax was, especially coming just a few days after Synaptics bought Validity.

The other company is IDEX, a Norwegian firm that focuses on incorporating fingerprint readers into things like credit cards. It shifted focus to mobile phones soon after Apple bought AuthenTec. “IDEX is convinced that fingerprint sensors will become the de facto standard mobile security in smartphones,” the company said in a recent financial report (pdf). The numbers from IHS show that it may be be right, at least at the higher end of the market.