BIO-Key, the Wall, N.J. provider of backend and on device authentication software for fingerprint readers, had a rough quarter last quarter –with total revenue for the three months ended June 30, 2012 of $533,000, representing a decrease of 46 percent from the same quarter in 2011–but the company remains upbeat about its prospects.
That’s because Apple recently acquired AuthenTec, a provider of fingerprint sensor technology and a long-time BIO-Key partner, signaling Apple’s endorsement of fingerprint scanning authentication.
Apple’s purchase of AuthenTec “is a strong validation of what we believe will be wide acceptance and use of finger biometric technology in the mobility market,” BIO-Key CEO Mike DePasquale told NJTechWeekly.com in a recent interview. “Universal adoption is inevitable.”
All kinds of authentication, including authentication involving banking and financial transactions, are moving to mobile devices, DePasquale said. “We are very pleased because once the appliance is out there in the market and embedded in these mobile devices, BIO-Key’s software will take it from there.”
BIO-Key provides a universal solution that allows any device with any finger scanner made by any company to be able to match and validate a user’s ID, independent of that device or platform, he said. So with one enrollment, users can identify themselves on an Android smartphone and then move over to perhaps the new iPhone that would have a finger scanner in it. “We make it all work together, which is perhaps our unique value proposition in this industry,” he said.
Once finger scanners are embedded in mobile devices like tablets and smartphones, DePasquale envisions clients in the financial and healthcare industry deciding to incorporate finger scanning into their consumer applications.
“So let’s say a bank decides that there are so many users out there with iPhones that have embedded scanners, they’ll want them to access their bank account information with a scan of a finger. They’ll put our Web-Key backend matching solution on their authentication server and it will be easy for them to offer their users secure access to their bank accounts.”
DePasquale said Apple’s move won’t change how the company is addressing the market. The business market is approached through vertical channels, and the company sells through large integrators.
However, Apple’s move could “really open up the consumer market for us now,” he said, because there will be more and more devices that will be finger-capable. “That’s been one of the limiting factors that we’ve had to deal with in our market on the consumer side,” he noted.
BIO-Key recently made significant inroads into the corporate market by having its product endorsed by IBM, the company reported. Speaking at the firm’s quarterly conference call, DePasquale said that the company’s CTO has been working closely with IBM, because the company “understood what it would mean to BIO-Key if we could become part of their solution.”
“The coordinated effort could not have gone better,” he said. It not only resulted in BIO-Key’s endorsement in IBM’s Redguide program, but the company is already bearing fruits in signing up resellers. One of the new markets being addressed is the call center market.
On the down side, the company is now facing some patent infringement litigation from a company called Blue Spike related to U.S. Patents Nos.: 7,346,472; 7,660,700; 7,949,494; and 8,214,175. All four patents are titled “Method and device for Monitoring and analyzing signals. BIO-Key says it will vigorously defend itself against Blue Spike’s claims.