ChangeWave Research: Smart Card and Biometric ID Report
ChangeWave Research Report:Smart Card and Biometric ID ReportFingerprint ID and Advanced ID Cards Now Lead the IndustryOverview
Recent Alliance surveys have identified Smart Cards and Biometric IDs as growth areas. During the week of April 5-8, 2005 we surveyed Alliance members knowledgeable about Smart Cards and Biometric IDs to unearth key industry trends, including which companies stand to win and lose. A total of 326 Alliance members participated.
(A) Industry Trends: Biometric IDs and Smart Cards Fingerprint ID Considered Most Advanced Technologically. In a key finding, 37%
of respondents identified Fingerprint ID as the most advanced of the Biometric ID/Smart Card technologies – a 14 point jump from our July 2004 survey results. Advanced ID Cards (32%) came in second – up 4 points since July.
Advanced ID Cards and Fingerprint ID Best Suited To Meet Current Demands. Respondents chose Advanced ID cards (43%) as the technology best suited to meet current market demands. Fingerprint ID (42%) came in a close second.
Which Technology Will Attract the Most Spending? You Guessed It. When asked about spending over the next 12 months, 45% of respondents thought Advanced ID Cards would capture the most gains in spending (up 9 points since July); 35% said the same for Fingerprint ID products (up 16 points).
I. Biometric IDs
Identix Seen as Company Most Likely To Benefit. Identix received multiple mentions as the company most expected to benefit in the Biometric ID market. Respondent JTO2813 writes, “Identix has the largest base of fingerprint capture devices.” Regarding Facial Recognition, DRP2747 writes, "Identix…has a head start, both at consumer level and sophisticated enough for government security agencies."
Who is Most Likely to Gain Market Share in Biometric IDs. Identix (14%) and Viisage Technology (12%) are the Biometric ID companies seen as most likely to pick up market share over the next 12 months, echoing our July 2004 results.
II. Smart Cards
Top Trends. Security (28%) and Enhanced Technology/ Performance (28%) are considered the most important trends in Smart Cards today. Storage Capabilities (14%) also received double digit mention.
Smart Card Companies Most Likely to Gain Market Share. There are no predominant suppliers in this market. Public companies mentioned by respondents as most likely to gain market share include SCM Microsystems (5%) and ActivCard (5%).
ChangeWave Research: Smart Card and Biometric ID Report
(B) Contract Opportunities in Smart Card/Biometric Space
EDS Seen as Likely to Benefit from E-Passport Contract. Among companies awarded initial government contracts to develop and implement technology for the E-Passport Contract, Electronic Data Systems Corp (8%) is expected to benefit most over the next 12-24 months. Infineon Technologies (6%) is also expected to benefit.
(C) More on Smart Cards and Biometric IDs
Top Smart Card/Biometric ID Systems in the Work Place. Nearly three-in-ten respondents (29%) say their company currently uses a smart card or biometric ID system. Among these respondents, nearly twice as many use Contactless Proximity Access Cards (60%) as use Standard Swipe Cards (33%). Another 24% say they use Dual Access Cards (Combination Contactless Proximity & Swipe Cards).
HID Corporation is Top Supplier for Smart Card/Biometric ID Systems. Thirty percent (30%) of respondents say HID Corporation is the vendor/supplier of their smart card/biometric ID system, and another 11% say it is Honeywell.
Bottom Line: The current survey findings show Fingerprint ID to be leading among Biometric ID technologies, and Advanced ID Cards among Smart Card technologies. Not only are these seen as most technologically advanced, but respondents also find them:
(a) Most suited to meet current market demands, and (b) Most likely to attract the greatest spending over the next year.
Both Identix and Viisage Technology are seen as likely to benefit from current trends in Biometric IDs. ChangeWave Research Director Michael Shulman also notes that two other categories – Facial Recognition and Retina Scans – have lost ground since our July ‘04 survey (Facial Recognition fell from 24% to 18%, Retina Scans from 16% to 10%).
Regarding the Smart Card market, there are no predominant suppliers, but public companies mentioned as most likely to gain market share include SCM Microsystems and ActivCard.
The survey results also found that Contactless Proximity Access Cards are the top Smart Card system now used in the work locale. Privately held HID Corporation (30%) was identified as a top vendor/supplier, along with Honeywell (11%).
The ChangeWave Alliance is a group of 5,000 highly qualified business, technology, and medical professionals in leading companies of select industries—credentialed professionals who spend their everyday lives working on the frontline of technological change. ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, and converts the information into proprietary quantitative and qualitative reports.
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ChangeWave Research: Smart Card and Biometric ID Report
I. Summary of Key Findings
IntroductionRecent Alliance surveys have identified Smart Cards and Biometric IDs as growth areas. During the week of April 5-8, 2005 we surveyed Alliance members knowledgeable about Smart Cards and Biometric IDs to unearth key industry trends, including which companies stands to win and lose. A total of 326 Alliance members participated.
Contractors Most Likely to Benefit-Next 12-24 Months EDS Corp (8%) Infineon Technologies
(6%)
Biometric ID/Smart Card Systems in the WorkplaceTop Systems: 29% say they currently
use a Smart Card or Biometric ID system at work
Nearly twice as many say they use Contactless Proximity Access Cards (60%), as use Standard Swipe Cards (33%)
Another 24% say they use Dual Access Cards (Combination Contactless Proximity & Swipe Cards)
Top Suppliers/Vendors: HID Corporation (30%) Honeywell (11%)
ChangeWave Research: Smart Card and Biometric ID Report
II. The Findings
Total Respondents (n = 326)
(A) Industry Trends: Biometric IDs and Smart Cards (1) Question Asked: Which of the following Biometric ID and Smart Card technologies do you believe are currently the most technologically advanced? (Please Choose No More Than Two)
CurrentSurveyApr ‘05
PreviousSurveyJul ‘04
Fingerprint ID 37% 23%Advanced ID Cards (Smart Cards, Digital Identification) 32% 28%Retina Scan 25% 25%Facial Recognition 16% 13%Iris Recognition 13% 14%Voice Recognition 5% 4%Don't Know 23% 30%Other 1% 1% Fingerprint ID Considered Most Advanced Technologically. In a key finding, 37% of respondents identified Fingerprint ID as the most advanced of the Biometric ID/Smart Card technologies – a 14 point jump from our July 2004 survey results. Advanced ID Cards (32%) came in second – up 4 points since July.
(1A) Question Asked: And which of the following technologies do you believe are best suited for meeting the demands of the current market? (Please Choose No More Than Two)*
CurrentSurveyApr ‘05
PreviousSurveyJul ‘04
Advanced ID cards (Smart Cards, Digital Identification) 43% 31%Fingerprint ID 42% 27%Facial Recognition 16% 21%Retina Scan 15% 24%Iris Recognition 8% 13%Voice Recognition 6% 4%Don't Know 19% 22%Other 1% 1%*The July 2004 survey question asked about “the current homeland security market”, vs. “the current market” in the April 2005 survey.
Advanced ID Cards and Fingerprint ID Best Suited To Meet Current Demands. Respondents chose Advanced ID cards (43%) as the technology best suited to meet current market demands. Fingerprint ID (42%) came in a close second.
ChangeWave Research: Smart Card and Biometric ID Report
(1B) Question Asked: Which of the following technologies do you believe will attract the most spending over the next 12 months? (Please Choose No More Than Two)
CurrentSurveyApr ‘05
PreviousSurveyJul ‘04
Advanced ID cards (Smart Cards, Digital Identification) 45% 36%Fingerprint ID 35% 19%Facial Recognition 18% 24%Retina Scan 10% 16%Voice Recognition 7% 4%Iris Recognition 7% 11%Don't Know 22% 26%Other 0% 1%
Which Technology Will Attract the Most Spending? You Guessed It. When asked about spending over the next 12 months, 45% of respondents thought Advanced ID Cards would capture the most gains in spending (up 9 points since July); 35% said the same for Fingerprint ID products (up 16 points).
(2) Question Asked: What company do you think most stands to win in each of the following areas? (Simply skip any areas in which you are not knowledgeable)
Identix Seen as Most Likely To Benefit. Identix received multiple mentions as the company respondents most expect to benefit in the Biometric ID and Smart Card market.
Regarding Fingerprint ID, Respondent JTO2813 writes, “Identix has the largest base of fingerprint capture devices.”
Regarding Facial Recognition, Respondent DRP2747 says, "Identix - Advanced has a head start, both at consumer level and sophisticated enough for government security agencies." Respondent JTO2813 adds, "Identix has the most accurate facial recognition system according to the latest government tests."
A more complete Sample of Alliance Member Responses can be found in Appendix A on page 16.
ChangeWave Research: Smart Card and Biometric ID Report
I. Biometric IDs
(3) Question Asked: What is the most important trend today in the Biometric ID space? Which company(s) do you think is best positioned to capitalize on this trend and why?
Fingerprint ID 21%Facial Recognition 15%Retina Scans 9%Identity Theft 6%Terrorist Countermeasures 6%Smart Cards 6%Digital Signature 6%Security in General 12%Other 24%
What’s Hot and Who’s Best Positioned in Biometric IDs? Fingerprint ID (21%) was identified as the most important trend today in Biometric ID, with Identix considered the leading company positioned to capitalize on this trend.
Facial Recognition (15%) was second, with Viisage Technology and GE mentioned as well positioned companies in this area.
Respondent DRP2747 summarizes trends in the Biometric ID space as follows: "I think there are at least three very important trends. One is low cost protection for consumers. Here I think fingerprint companies and maybe face recognition companies are best positioned. Then there is the trend for better high security access control. Here iris scan and maybe fingerprint companies are best positioned. Finally, there is recognition in a crowd or from a phone call where face recognition and voice recognition respectively are really the only players."
A more complete sample of Alliance Member responses to this question can be found in Appendix B on page 19.
ChangeWave Research: Smart Card and Biometric ID Report
(4) Question Asked: Here is a list of companies within the Biometric ID space. In your opinion, which companies are most likely to pick-up market share over the next 12 months? (Please Choose No More Than Two) *
CurrentSurveyApr ‘05
PreviousSurveyJul ‘04
Identix (IDNX) 14% 14%Viisage Technology (VISG) 12% 11%Imagis Technologies (IMTIF) 3% 4%BIO-key (BKYI) 2% 1%Nuance Communications (NUAN) 2% 5%PEC Solutions (PECS) 2% 3%Saflink (SFLK) 1% 5%Don't Know 64% 63%Other 1% 3%*The July 2004 survey question asked “which companies are most likely to pick-up market share over the next 12 months within the Homeland Security market.”
Who is Most Likely to Gain Market Share in Biometric IDs. Identix (14%) and Viisage Technology (12%) are the Biometric ID companies seen as most likely to pick up market share over the next 12 months, echoing our July 2004 results.
II. Smart Cards(5) Question Asked: The Smart Card market is expanding, even as the technologies are changing rapidly. What is the most important trend today in the Smart Card space? Which company(s) do you think is best positioned to capitalize on this trend and why? Security 28%Enhanced Technology/Performance 28%Storage Capabilities 14%Access to Financial Services 8%Biometrics 6%Other 17%
Top Trends. Security (28%) and Enhanced Technology/ Performance (28%) are considered the most important trends in Smart Cards today. Storage Capabilities (14%) also received double digit mention.
As respondent JAS5505 writes, "Those vendors that integrate smart card technology in a larger security solution that provides authentication with a large perceived benefit to the end-user without a significant impact to network/system administrators.” Respondent SKY5085 adds, "Smart cards can be reprogrammed to meet the most current needs. Bio-Metric is read and that's it. Smart cards are flexible."
A more complete sample of Alliance Member responses to this question can be found in Appendix C on page 22.
ChangeWave Research: Smart Card and Biometric ID Report
(6) Question Asked: Here is a list of companies within the Smart Card space. Which companies do you think are most likely to pick-up market share over the next 12 months? (Please Choose No More Than Two)*
CurrentSurveyApr ‘05
PreviousSurveyJul ‘04
SCM Microsystems (SCM) 5% 7%ActivCard (ACTI) 5% 3%Drexler Technology (now LaserCard Corporation – LCRD) 4% 7%Fargo Electronics (FRGO) 4% NAGemPlus International (GEMP) 4% 4%ImageWare Systems (IW) 4% 4%Cubic Corp. (CUB) 3% 4%Maximus (MMS) 2% 3%On Track Innovations (OTIV) 2% NAOberthur Card Systems (OBTHF) 1% 2%Sense Holdings (SEHO) 1% 2%Don't Know 61% 66%Other 1% 1%*The July 2004 survey question asked “which companies are most likely to pick-up market share over the next 12 months within the Homeland Security market.”
Smart Card Companies Most Likely to Gain Market Share. There are no predominant suppliers in this market. Public companies mentioned by respondents as most likely to gain market share include SCM Microsystems (5%) and ActivCard (5%).
(6A) Question Asked: Above and beyond this list, what other Smart Card Companies (or suppliers) are poised for growth over the next 12-24 months? Please mention the company(s) and why.
NAN5912 writes, "HID Corp. provides a platform and lets anyone use write to the chip, owned by ASSA ABLOY they have lots of cash for R&D."
JFE5370 writes, "HID Corp, they make multi-function cards that can save a lot of money for large deployments."
REM5670 writes, "Philips, due to their multiple technology offerings and advanced manufacturing processes."
GUA9841 writes, "Hypercom is expanding in Europe and also Lipman."
EIG1583 writes, "Major cc companies... Amex, Visa, Master Card."
DCK0418 writes, “Again, DynaSig Corporation. They have the system level software completed as well as hardware so they are poised. As to why, please read previous comments.”
ChangeWave Research: Smart Card and Biometric ID Report
We took a closer look at four companies in the Smart Card and Biometric ID Space. Here’s what we found:
(7) Question Asked: In the Alliance's last Homeland Security survey Identix, Viisage Technology, Drexler Technology (now LaserCard Corporation), and SCM Microsystems were identified as companies likely to gain market share. In the 9 months since, these companies have not performed as well as expected. If you are familiar with any of these 4 companies, please give us your thoughts as to recent performance issues and current prospects.
(a) Identix (IDNX):
PKM7870 writes, "Face it software works, however the required hardware is expensive."
JTO2813 writes, "Seems to have a lot of promise however they have not yet been able to deliver that promise to the bottom line. They keep saying that profitability is right around the corner. They need to deliver before the street will believe."
BAT1265 writes, "Corporate market not yet accepting of fingerprint technology or smart cards. Not convinced of need for multi-factor authentication."
DRP2747 writes, "I think they will do very well. They have products in at least two spaces, fingerprint and face recognition. They also handle at least two and maybe all three of what I consider the important industry trends."
DPB4534 writes, "If you look at this company the fundamentals are weak. The sector has been weak with investors moving into the sector in the past few weeks. If the big money keeps moving into the sector this could pick up."
EDD0142 writes, "Not winning government contracts."
GAN7111 writes, "US Government contract may be on the way."
NAN5912 writes, “Good product, price is ok, not innovating as fast as they should.”
(b) Viisage Technology (VISG):
NAN5912 writes, "Good product but one dimensional."
JTO2813 writes, "Viisage is a disaster in progress. There are a number of lawsuits against them right now for the way they handled their finances. Stay far, far away from them."
JJP3936 writes, "Highest public awareness." DRP2747 writes, "Should do okay, but I think Identix is better positioned."
ChangeWave Research: Smart Card and Biometric ID Report
TMA3415 writes, "Adoption rates of technology have been lower than expected, but public safety typically does not embrace new technologies until they are proven."
DPB4534 writes, "Again Viisage has weak fundamental analysis. The big money is moving away from this sector. Poor outlook."
NED2415 writes, "Everybody is waiting, we still have to cross the chasm so to speak. Investments by companies are still limited to trials. Suppliers (f.i. to Walmart) only do as little as possible. And many companies found out that it is not so easy to make the systems work (We should know because we've been in the business for more than 30 years)."
HOS8562 writes, "They have a niche with their product, but they might get new competition."
DRP2747 writes, "Drexler [LaserCard] should do very well in the smart card space."
(d) SCM Microsystems (SCM): BAT1265 writes, "Mixed businesses. Old technology."
DPB4534 writes, "Very Poor Fundamentals. The sector has no money and no indication of a move upward."
ChangeWave Research: Smart Card and Biometric ID Report
(B) Contract Opportunities in Smart Card/Biometric ID Space
We asked the Alliance about some specific major contract opportunities in the government Smart Card/Biometric ID space. Here’s what we found:
(8) Question Asked: The new US Government Visa Waiver Program (US-VISIT) will allow visiting citizens of participating countries to enter the United States using a machine-readable passport. They will be allowed to stay in the country for up to 90 days without obtaining a visa.
The US-VISIT contract was awarded to the Smart Border Alliance, which is lead by Accenture LLP and includes key members Raytheon, The Titan Corporation, and SRA International, Inc. Are there other companies that stand to benefit from this contract? Please mention why?
NAN5912 writes, "Other than size none of these companies have the best technology for this job. They'll have to buy better technology from somewhere. Unfortunately, it's a government contract so don't expect the best stuff at the best price."
DCK0418 writes, "Unknown until now, DynaSig has gotten very positive response from recent NIST conference in Washington DC. They now know they have options."
PGA2743 writes, "Possibly Sun Microsystems, Oracle, and whoever is supplying the custom software to implement. All because of their security products offered."
JJP3936 writes, "Slow rollout will hamper this system and suspect conflict of interest activities with Accenture."
STR2345 writes, "I believe that many firms will benefit including those that provide databases, hardware on which databases are stored and which must be used to query in real-time to determine access to US borders, and several printing firms across the visa-waiver countries."
ChangeWave Research: Smart Card and Biometric ID Report
(9) Question Asked: The US Government Printing Office has been charged with designing and printing the new US electronic passports. Eight companies have received initial government contracts to develop and implement the technology that will go into the e-passports. Which one(s) do you believe will benefit most over the next 12-24 months and why? (Please Choose No More Than Two) Electronic Data Systems Corp 8%Infineon Technologies 6%BearingPoint 2%Axalto 1%SuperCom 1%OTI America Inc 1%ASK Contactless Technologies 0%Oberthur Card Systems 0%
EDS Seen as Likely to Benefit from E-Passport Contract. Among companies awarded initial government contracts to develop and implement technology for the E-Passport Contract, Electronic Data Systems Corp (8%) is expected to benefit most over the next 12-24 months. Infineon Technologies (6%) is also expected to benefit.
Here is a sample of Alliance Member responses as to why EDS and Infineon will benefit most:
(a) Electronic Data Systems Corp (8%)
STR2345 writes, "Integration is key and EDS has strengths in this area." JOH9349 writes, "The most prolific." JAM2257 writes, "Strong historical success rate." STQ5468 writes, "Largest infrastructure to meet tight schedules." GUA9841 writes, "Data management." OHM6758 writes, "Good marketing.” WAR9725 writes, "Experience with large data handling and federal government.” MST0142 writes, "Size.”
(b) Infineon Technologies (6%)
STR2345 writes, "Low level hardware and technological platforms." GUA9841 writes, "Chip is a fundamental part." OHM6758 writes, “Experience.”
ChangeWave Research: Smart Card and Biometric ID Report
(10) Question Asked: Looking out over the next 12-24 months, what other large-scale contracts will have a big effect on the smart card/biometric ID marketplace? Who stands to win and lose? NAN5912 writes, "Universities, health care providers. Business will be broadly spread
around."
STR2345 writes, "The UK Government's ID card plans will benefit several global and European players potentially including GemPlus, Schlumberger (both with strong presence in UK financial cards market), Accenture and E&Y (both with stronghold in UK government)."
MAK7890 writes, "I am not sure which company will be supplying the 'laser visa' cards needed by Canadians to come to the United States. This will have a huge impact on Canadians."
BUR3020 writes, "Discover Card has joined Pay By Touch as a partner."
BAT1265 writes, "DoD Common Access card program."
JAS5505 writes, "The telecom market is inherently smart card based (i.e., SIM format smart cards). Markets like China that consume hundreds of millions of SIM cards can make or break individual companies."
TMA3415 writes, "The US VISA civil opportunity."
We also asked about China.
(11) Question Asked: China claims that 100 million of its citizens will have new e-Passports by the end of 2005. What companies will benefit most from this increase in Chinese spending?
Here are the Alliance Member Responses:
Company Mentions: XRA4574 writes, "On Track Innovations." FEA9527 writes, "Symbol Technologies." JOH9349 writes, "IBM, HP, StorageTek & EMC." JAS5505 writes, "Local Chinese companies whose products are designed to
follow Chinese government encryption standards, like Feitian Technologies." RUS0368 writes, "Indonesian government is working on e-Passport as well."
Other: DAV2704 writes, "International companies." MAL7015 writes, "Airlines and hotels".
ChangeWave Research: Smart Card and Biometric ID Report
These last three questions focus on the type of smart cards/biometric IDs you currently use at your work locale.
(12) Question Asked: Does your company currently use any type of smart card or biometric ID system?
Yes 29%No 57%Don't Know/No Answer 14% Smart Card/Biometric ID Usage. Nearly three-in-ten respondents (29%) say their company currently uses a smart card or biometric ID system.
(12A) Question Asked: What type of smart card or biometric ID system(s) does your company/work locale currently use? (Check All That Apply)
Contactless Proximity Access Cards 60%Standard Swipe Cards 33%Dual Access Cards (Combination Contactless Proximity & Swipe Cards) 24%Fingerprint ID System 13%Advanced Active Cards (Contactless from up to 4 Feet Away, "Hands Free") 5%Retina Scan System 2%Iris Recognition System 2%Long Range Advanced Active Cards (Contactless from up to 7 Feet Away, "Hands Free")
1%
Voice Recognition System 1%Facial Recognition System 0%Do Not Use a Smart Card or Biometric ID System 1%Other 5%
Top Smart Card/Biometric ID Systems in the Work Place. Among respondents whose company currently uses a smart card or biometric ID system, nearly twice as many use Contactless Proximity Access Cards (60%) as use Standard Swipe Cards (33%). Another 24% say they use Dual Access Cards (Combination Contactless Proximity & Swipe Cards).
(12B) Question Asked: Who is the vendor/supplier of the equipment and/or service for your company's smart card or biometric ID system(s)?
HID 30%Honeywell 11%Motorola 7%Other 56%
HID Corporation is Top Supplier for Smart Card/Biometric ID Systems. Thirty percent (30%) of respondents say HID Corporation is the vendor/supplier of their smart card/biometric ID system, and another 11% say it is Honeywell.Appendix A
ChangeWave Research: Smart Card and Biometric ID Report
(2) Question Asked: What company do you think most stands to win in each of the following areas? (Simply skip any areas in which you are not knowledgeable)
Sample of Alliance Member Responses:
(a) Fingerprint ID:
NON4028 writes, "Identix (IDNX).“
GAN7111 writes, "Identix (IDNX) - two fingers is the most popular one."
JTO2813 writes, "Identix (IDNX), Cogent (COGT) - Identix has the largest base of fingerprint capture devices. Cogent has the AFIS to search the databases for the correct match."
NAN5912 writes, "Identix (IDNX) - good product good price, just merged with Visionics so will be an even stronger player."
AMA8226 writes, "Identix (IDNX) - getting contracts and business."
HOS8562 writes, "Identix (IDNX) - I used their system and worked with their tech support. They know what they are doing and the product is performing well."
EDD0142 writes, "Identix (IDNX) – affordability."
HOW7595 writes, “Imagis Technologies (IMTIF) - has the only tech leads right now."
HOW6770 writes, "Imagis Technologies (IMTIF) - the leading technologies.”
HFC8959 writes, "Cogent (COGT) - good technology, extensive government contracts broad customer base."
KEV9717 writes, "Cogent (COGT) - leader with great products."
KIM0900 writes, "STMicroelectronics (STM) - advanced development "
BGR3837 writes, "SafLink (SFLK)"
TMA3415 writes, "Motorola (MOT), NEC (NIPNY) - large imbedded base of users, difficulty of switching vendors."
GUG7607 writes, "Microsoft (MSFT) - direct involved in the software development."
VRO2791 writes, "Zvetco Biometrics (Privately Held) - Bloomberg uses them. Their products are reasonably priced for the corporate enterprise."
DRP2747 writes, "Kinetic Sciences (KSI) or STMicroelectronics (STM) - Kinetic Sciences makes the hardware that goes into other's products, STM makes the silicon."
JTO2813 writes, "Identix (IDNX) - Identix has the most accurate facial recognition system according to the latest government tests."
DRP2747 writes, "Identix (IDNX) - Advanced, has a head start, both consumer level and sophisticated enough for government security agencies."
TMA3415 writes, "Viisage (VISGE)."
HIG8454 writes, "Verint (VRNT) – established."
DIR3945 writes, "RF Logics (Privately Held) - they offer facial recognition at very attractive pricing."
NAN5912 writes, “ImageWare (IW) - the trend in this business is to combine technologies to get the most accurate read. ImageWare (and several other companies) do this."
ELS7356 writes, "General Electric (GE) - they bought a facial recognition company (Viisage, I think) which was really ahead of the pack a couple of years ago."
(c) Iris Recognition:
NAN5912 writes, "Nuance (NUAN) - combines Iris and voice with should make it faster and easier to use.”
NED2415 writes, "Laclede Group (LG) - products work reasonably well."
DRP2747 writes, "Iridian Technologies (Privately Held) - already in use. Variety of products."
BGR3837 writes, "SafLink (SFLK)."(d) All Other Areas:
DCK0418 writes, "DynaSig Corporation (Privately Held) - This company is ready to go public. Check them out at ISC West this week in Vegas and you will see why. They
ChangeWave Research: Smart Card and Biometric ID Report
already have some large clients and ready to roll. All they have to do is let people know that we don't have to give up anything to be authenticated. Also, since this device uses something that can not be stolen, this makes it the most secure device as well."
GCR2838 writes, "Northern Computers (NCI)."
NED2415 writes, "Nedap (Privately Held) - versatile RFID systems that work and are net-connected."
BUR3020 writes, "Pay by touch fingerprint ID (Privately Held) - Because they are focused in one market and have aggressive patent strategies and legal follow-up. Secure payment transactions is their market. They have a strong board of directors which will help make this company successful."
CHA0069 writes, "Biometrics Security (BMTS) - actually used by military and financial institutions in Israel.”
JAS5505 writes, "Digital authentication via smart cards – many, many vendors - provides 2-factor authentication at relatively low costs without issues of privacy."
GUA9841 writes, "Hypercom (HYC), Lipman (LPMA)."
VRO2791 writes, "HID (Privately Held) - security cards of all styles. One of the larger vendors of these types of products."
RTW2421 writes, "Vocalocity, Inc. Atlanta (Privately Held) - Industry leading OEM of standards-based voice recognition software."
HOS8562 writes, "PEC Solutions (PECS) - I also worked closely with this company’s products and tech support. They are always on top of the problems."
BGR3837 writes, "SafLink (SFLK)."
KEV9717 writes, "Cogent (COGT), Verisign (VRSN) - leader with great products."
ChangeWave Research: Smart Card and Biometric ID Report
Appendix B
(3) Question Asked: What is the most important trend today in the Biometric ID space? Which company(s) do you think is best positioned to capitalize on this trend and why?
Fingerprint ID 21%Facial Recognition 15%Retina Scans 9%Identity Theft 6%Terrorist Countermeasures 6%Smart Cards 6%Digital Signature 6%Security in General 12%Other 24%
Sample of Alliance Member Responses:
(a) Fingerprint ID (21%)
DRP2747 writes, "I think there are at least three very important trends. One is low cost protection for consumers. Here I think fingerprint companies and maybe face recognition companies are best positioned. ..."
GAN7111 writes, "Identix."
AMA8226 writes, "Identix- established."
EDD0142 writes, "Identix."
JTO2813 writes, "I believe that Identix is poised to capture a large segment of this business. They have a blanket purchase agreement with the DHS for fingerprint machines."
HFC8959 writes, "Cogent (COGT), Good technology, extensive Government contracts, broad customer base."
VRO2791 writes, "Temporary ID's/access cards are a big product in most corporate offices. I also feel that fingerprint and other methods to sign on will become more popular as the need for higher encryption for secure access becomes necessary. SOX compliance is going to create business."
(b) Facial Recognition (15%)
DRP2747 writes, "…Finally, there is recognition in a crowd or from a phone call where face recognition and voice recognition respectively are really the only players."
DAV2704 writes, "Facial Recognition...Ease of obtaining"
ChangeWave Research: Smart Card and Biometric ID Report
DIR3945 writes, "Facial recognition does not require the user to actually touch the equipment. Just walk up and get access."
WAS9107 writes, "Viisage Technology."
ELS7356 writes, "GE, Image ware for facial recognition."
(c) Retina Scans (9%)
TWP4433 writes, "Retina scans would likely be the most difficult visual technology to circumvent. DNA testing is the most difficult chemical/physical technology to circumvent."
MGI0417 writes, "Retina scan & Iris recognition."
DRP2747 writes, " … Then there is the trend for better high security access control. Here, iris scan and maybe fingerprint companies are best positioned…"
(d) Identity Theft Prevention (6%)
MAC3180 writes, "Bruce Schnier recently wrote about the problems that are inherent in biometric scanning. The biggest problem is that if someone wants to be you they just cut off that item. Recently in Maylasia a biometric controlled Mercedes foiled some thieves. So they went back to the owner and chopped off his finger."
JJH8606 writes, "Identity Theft prevention."
(e) Terrorist Countermeasures (6%)
USR1295 writes, "Terrorist identification."
KEV9717 writes, "Terrorism threats will drive sophistication in security access."
(f) Smart Cards (6%)
GJE4701 writes, "Biometrics in combination with smart cards"
DCK0418 writes, "DynaSig Corporation - because they have solved the most dreaded issue in private sector, privacy!! Also, recent episodes of 24 and Alias showed how physical biometric can be brutally compromised. DynaSig's device offers much higher level of security."
ChangeWave Research: Smart Card and Biometric ID Report
DLO0787 writes, "Security of everything is the most important trend. Bank transactions, airport security, corporate security, etc."
MRU3341 writes, "Security and Authentication."
FEA9527 writes, "A gross false sense of security, most systems are very easily defeated and have to have lose parameters that generate false positives and negatives, thieves will love these systems, there will be much chaos as deployed systems prove their vulnerability"
CHR4881 writes, "Not sure. We don't use it. But Citrix and Novell have some new security pieces that are neat."
(i) Other (24%)
NON4028 writes, "Saflink Corporation (SFLK)."
DAN6066 writes, "Voice recognition."
WIL1338 writes, "Quick & reliable technology to scan travelers on airports and important institutes like governmental org. Goals: anti terrorism, entrance control, laptop entry (got it on my tablet pc), theft prevention in big organizations."
RTW2421 writes, "Movement towards biometric ID in security applications and away from passwords, smart cards and other user independent technologies."
JAY1051 writes, "Minimization of false positive and false negatives."
TMA3415 writes, "Matching accuracy and speed required for civil systems."
PGA2743 writes, "Cost reductions in scanning devices. First to volume will win."
ChangeWave Research: Smart Card and Biometric ID Report
Appendix C
(5) Question Asked: The Smart Card market is expanding, even as the technologies are changing rapidly. What is the most important trend today in the Smart Card space? Which company(s) do you think is best positioned to capitalize on this trend and why? Security 28%Enhanced Technology/Performance 28%Storage Capabilities 14%Access to Financial Services 8%Biometrics 6%Other 17%
Sample of Alliance Member Responses:
(a) Security (28%)
STE3218 writes, "Use of smart cards to protect information like health and financial records. Again, no one company is really standing out at any one time."
JAS5505 writes, "Those vendors that integrate smart card technology in a larger security solution that provides authentication with a large perceived benefit to the end-user without a significant impact to network/system administrators.”
LID7701 writes, "Security enhancement."
CLA8059 writes, "Security and Identification."
KEV9717 writes, "Terrorism threats will drive sophistication in security access. Verisign is a leader in technologies that support this market."
STR2345 writes, "Reduction of identity and related fraud (such as financial fraud, benefits fraud)."
DCK0418 writes, "Privacy for private sector and higher security for government and military sectors. DynaSig Corporation offers the solution for both."
VRO2791 writes, "... On the smart ID cards, more powerful microcontrollers will allow for better security."
ChangeWave Research: Smart Card and Biometric ID Report
(b) Enhanced Technology/Performance (28%)
REM5670 writes, "The emergence of NFC (Near Field Communication). This will change the way we will transact payments in the coming future. Pilot programs are already in place for ticketing in public transportation systems. Philips is well positioned thanks to her lead participation in the NFC consortium."
GEE7905 writes, "Most important is the actual full implementation of using the technology across the whole organization (instead of only planning use, or only partial implementation). Today you cannot get access to things needed to do your job without the smartcard."
SKY5085 writes, "Smart cards can be reprogrammed to meet the most current needs. Bio-Metric is read and that's it. Smart cards are flexible. Bio-Metric are not."
JJH8606 writes, "RFID."
JFE5370 writes, "Java enabled Smart Cards."
NED2415 writes, "Miniaturizing of tags and making them cheaper. Omron may do well, Philips, 3M."
DAV2704 writes, "Manufacturing and inventory control."
LEO3163 writes, "Imageware, more R and D spending."
DEN7498 writes, "Handling multiple requirements."
PGA2743 writes, "First to volume with the broadest implementation of standards will win."
(c) Storage Capabilities (14%)
GJA7838 writes, "Storage capability on a card medium you can carry in a wallet."
MGI0417 writes, "More information on cards."
NAN5912 writes, "Lots of digitals info can now be put on a chip, parking, cashless vending, medical info, etc. HID is a strong player."
MST0142 writes, "Being able to store all your medical history on a card."
JAY1051 writes, "Amount of data that can be stored and correlated."
ChangeWave Research: Smart Card and Biometric ID Report
(d) Access to Financial Services (8%)
STQ5468 writes, "Bank Cards as used in Europe."
WIL1338 writes, "A trend is payment with a card that carries a small sum of money. Europe has this (NL): no phone costs -quick. No credit card fraud, small risk per card."
25873writes, "Importation of European financial services on smart cards."
(e) Biometrics (6%)
DRP2747 writes, "Smart cards need some form of easy biometric verification coupled with the smart card."
RFO9507 writes, "Networking, data-mining, and discrepancy resolution for independent organizational databases of biometric information."
(f) Other (17%)
EIG1583 writes, "Smart Cards have failed in the USA pre 9/11. Culture has changed in the USA. Thus what is good for America will drive the rest of the technology."
BAT1265 writes, "Most public investors fail to recognize that most of the innovation is being accomplished at the private company level. The public company offerings are very me-too."
GUA9841 writes, "Hypercom-Manhattan-Cubic."
KIM0900 writes, "Gemplus - well established, dominant position."
AMA8226 writes, "Cubic doing government business a long time."
ChangeWave Research: Smart Card and Biometric ID Report
III. ChangeWave Research Methodology This report presents the findings of the latest ChangeWave Alliance survey on Smart Cards and Biometric IDs. The survey was conducted between April 5 - 8, 2005. A total of 326 Alliance members participated.
The Alliance’s proprietary research and business intelligence gathering system is based upon the systematic gathering of valuable business and investment information directly over the Internet from accredited members.
ChangeWave surveys its Alliance members on a range of business and investment research and intelligence topics, collects feedback from them electronically, interprets and reconciles the information in a cohesive manner and converts the information into valuable quantitative and qualitative reports. The Alliance has assembled its membership team from senior technology and business executives in leading companies of select industries. Nearly 3 out of every 5 members (58%) have advanced degrees (e.g., Master’s or Ph.D.) and 94% have at least a four-year bachelor’s degree.
The business and investment intelligence provided by the Alliance provides a real-time view of companies, technologies and business trends in key market sectors, along with an in-depth perspective of the macro economy – well in advance of other available sources.
ChangeWave Research: Smart Card and Biometric ID Report
IV. About ChangeWave Research
ChangeWave Research, a subsidiary of Phillips Investment Resources, LLC, identifies and quantifies "change" in industries and companies through surveying a network of thousands of business executives and professionals working in more than 20 industries. ChangeWave has a very unique asset in its 5,000-member Alliance. We have assembled our membership team from a broad cross section of more than 20 vertical markets such as telecom, semiconductors, data storage, and biotechnology, along with a wide range of professional disciplines including CIOs, IT managers and programmers, executive management, scientists, engineers and sales personnel. The ChangeWave Alliance is composed of senior technology and business executives in leading companies - credentialed professionals who spend their everyday lives working on the frontline of technological change. This proprietary research and business intelligence gathering system provides a real-time view of companies, technologies and business trends in key market sectors along with an in-depth perspective of the macro economy - well in advance of other available sources. ChangeWave surveys its 5,000 Alliance members on a wide range of investment research topics and converts the findings into valuable investment and business intelligence reports. ChangeWave delivers its products and services on the Web at www.ChangeWave.com. ChangeWave Research does not make any warranties, express or implied, as to results to be obtained from using the information in this report. Investors should obtain individual financial advice based on their own particular circumstances before making any investment decisions based upon information in this report.
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