In announcing their merger this week, two leading biometric security companies said they were casting a vote of confidence in the long-awaited emergence of a mass market for their products.
Identix Inc. of Sunnyvale, Calif., has agreed to pay about $40 million in stock for privately held Identicator Technology Inc. of San Bruno, Calif., in what amounts to the fusing of two top names in fingerprint verification.
In Identicator, Identix would gain not only a series of relatively low- cost devices for mass deployment on computers and other remote devices but also a strong presence in the banking market.
Identicator has business relationships with the American Bankers Association, MasterCard International, the Society for Worldwide Interbank Financial Telecommunication, and Mellon Bank Corp., among others. Its systems are commonly used in employee background checks and in check- cashing and account-opening operations. It supplied the biometric component of a widely followed U.S. Army smart card trial at Fort Sill, Okla.
The Identicator DFR-200 scanner, at a unit price of $99, is being installed on personal computers for user verification and access control. Identicator president and chief executive officer Oscar R. Pieper said the price under $100 opens up mass-market possibilities, and Identix, with 450 employees compared with Identicator's 35, can prove a powerful aid to distribution.
"It was extremely important to have a low-cost, deliverable system that was fast, user-friendly, and secure," Mr. Pieper said. "Our whole activity is to replace passwords with fingerprints."
Identix, which had sales of $80 million last year, approached the same kinds of opportunities but at the "high end" of the market. Its industrial- strength workstations are widely deployed in law enforcement and large- scale corporate networks around the world.
"This is the best possible consolidation event in our industry," said Identix chairman and CEO Randall C. Fowler. The acquisition "gives us the full spectrum of hardware and software products. I don't see anything at this moment that could add more strategic value."
"This is certainly the largest deal the biometric industry has seen in size and scope," said Erik Bowman, an analyst at Cardtech/Securtech, which organizes the biggest annual trade show on smart cards and security technologies.
"It gives the company increased potential to hit four specific markets- government, law enforcement and large-scale ID, information technology, and financial services," Mr. Bowman said.
Much of the competition is between technologies, and Mr. Fowler said he sees fingerprinting winning out.
"I think all signature products will disappear because they have a short-term and long-term evolutionary problem," he said. "Eye products will disappear because they are expensive and difficult to use, and hand geometry will disappear because it is easy to spoof."