Mobile Biometric Applications Rawlson O’Neil King Lead Researcher, Biometrics Research Group. Chris Burt, Contributing Editor, BiometricUpdate.com All information, analysis, forecasts and data provided by Biometrics Research Group, Inc. is for the exclusive use of subscribing persons and organiza- tions (including those using the service on a trial basis). All such content is copyrighted in the name of Biometric Research Group, Inc., and as such no part of this content may be reproduced, repackaged, copies or redistributed without the express consent of Biometrics Research Group, Inc. All content, including forecasts, analysis and opinion, has been based on information and sources believed to be accurate and reliable at the time of publishing. 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Through integration of our research results with Biometrics Research Group has positioned itself qualitative analysis from our BiometricUpdate. as the world’s preferred supplier of pure-play com news service, we provide actionable busi- market research and consultancy services fo- ness analysis. cused on the biometric marketplace, which in Research Methodology Biometrics Research Group, Inc. uses a com- tive on the issues of market acceptance and bination of primary and secondary research future direction of the industry. methodologies to compile the necessary infor- Biometrics Research Group, Inc. also applies its mation for its research projections. own proprietary micro- and macroeconomic The conclusions drawn are based on our best modeling using a regression analysis methodol- judgment of exhibited trends, the expected ogy to determine the size of biometric and re- direction the industry may follow, and consid- lated-industry marketplaces. 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To provide balance to these Inc.’s own repository of news items. This infor- interviews, industry thought leaders who track mation was used to enrich and externalize the the implementation of the biometric technolo- primary data. Data sources are cited where gies are also interviewed to get their perspec- applicable. biometricupdate.com | 2 FIDO® Face Authenticator Ŷ High-performance facial recognition Ŷ Active and passive spoof detection Ŷ Several integration options Ŷ Android and iOS support Ŷ FIDO® Certified Client and Server also available +1.781.276.4000 | [email protected] YYYCYCTGEQOƄFQ Executive Overview Mobile biometric applications operate on mo- Mobile biometrics will continue to experience bile devices such as smartphones and tablets, exponential growth due to increased consumer with “apps” utilizing embedded software and demand for convenient security, particularly sensors to make secure use of those devic- where secure use of mobile devices is especial- es and apps more convenient. They do so by ly critical, such as for mobile banking and com- enabling the owner of a device to use their merce. Adoption of standards such as FIDO® biometrics to authenticate their identity as an will further drive competition, innovation, and enhancement or alternative to passwords. ultimately adoption of new biometric authenti- cation methods. Market Synopsis In 2018, Biometrics Research Group, Inc. proj- number of inactive units, units being retired and ects that revenue associated with mobile bio- other units being recycled and distributed else- metrics will total US$10 billion based on 3.2 where (typically in other developing markets). billion users. This projection has increased from Acuity Market Intelligence published its ‘Bio- our last research report on mobile biometrics, metric Smartphone Update’ in January 2017, in which we projected that biometrics in mo- which estimates that the number of smart- bile devices will generate approximately US$9 phones incorporating fi ngerprint or eye-based billion worth of revenue by 2018 for the biomet- biometrics globally has doubled since January rics industry. 2016. Their report fi nds that “87 smartphone Biometrics Research Group continues to believe vendors have introduced 346 biometric smart- that mobile biometrics will transition between phones in the past year,” which brings the total 2015 to 2020 from a consumer adoption phase number of biometric smartphone models intro- to full maturity, enabling the technology to duced since 2013 to 549. overtake existing authentication technologies. This fi gure is more than double the 200 models By 2020, we estimate that biometrics will be that Acuity Market Intelligence reported in Jan- ubiquitous, installed in 100 percent of mobile uary 2016. In addition, the report fi nds that the devices. This transition would meet IBM’s 2010 quarterly average price of a biometric smart- prediction that biometrics would ultimately phone dropped from $849 to $277 from 2013 provide all security authentication capabilities to 2016. There are also 127 biometric smart- for individuals using mobile devices within fi ve phone models selling for $150 or less. years. “The proliferation of biometric smartphones is A driving force for the wide implementation of extraordinary. The 500 models currently avail- mobile biometrics will be the continued: rapid able on the market today represent a ten-fold expansion of smartphone users. Biometrics Re- increase in just two years,” said Maxine Most, search Group, Inc. estimates that smartphone Acuity Market Intelligence principal. “Biometric manufacturer shipments in the U.S. were 79 smartphone growth will continue as mobile ap- million in 2011, rising to 155 million units in 2014, plication security, particularly for fi nancial ser- and will grow to 175 million units by 2018. Sales vices, demands biometric authentication, low- of smartphones in the U.S. were nearly 60 mil- cost apps and sensors drive down the cost of lion in 2011, will be 120.5 million in 2014 and will biometric integration, and consumers clamor to grow to be relatively fl at at 121 million in 2018. eliminate their reliance on passwords and pins.” Active subscribers (otherwise referred to as the “installed base”) was 115 million in 2011, is esti- The report also states that nearly one billion mated to be 240 million in 2014 and will grow biometric smartphones are currently in use, to be 279 million in 2018. Some analysts esti- which comprises 40 percent of the overall glob- mate the number of U.S. subscribers will exceed al smartphone market. 300 million in 2018, but these usually include a biometricupdate.com | 3 This market share is expected to escalate to The research consultancy previously projected 100% of the two billion smartphones shipped that worldwide mobile payment transactions annually within two years reaching 100% in- reached US$250 billion in 2014, and will reach stalled base penetration by 2022, Acuity said. US$750 billion in annual transactions with more than 700 million users by 2020. We believe bio- Biometric smartphones entered the market in metrics will speed mobile commerce, especially 2014, initially with 28 vendors off ering mostly in North America, because the technology can one model. Today, of the 87 vendors off ering off er a higher level of security, while providing biometric smartphones, more than 30 off er at an intuitive customer experience. least six models while ZTE, Huawei, Lenovo, Samsung and Xiaomi have each introduced at Analysts generally predict that there will be a least 20 models. rush by smart mobile device manufacturers to integrate biometrics technology into