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Biometrics draws crowd
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November 14, 2001: 11:33 a.m. ET
Companies showcase biology-driven identity recognition technology.
By Staff Writer Richard Richtmyer
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LAS VEGAS (CNN/Money) - The business of biometrics has drawn a lot of interest on Wall Street and in other circles recently; and a raft of biometrics firms from across the globe were spreading the word at Comdex this week.
In fact, enough were on hand at this year's event to form their own pavilion on the convention center floor, which the conference organizers dubbed "Biometropolis." They were showcasing technologies ranging from fingerprint scanners, to voice and facial recognition systems.
Although the dictionary defines it as "the statistical analysis of biological observations and phenomena," the term "biometrics" is used most often these days to refer to the technology and science of using unique biological characteristics to verify a person's identity.
So far, the deployment of biometric identification systems in the United States has been limited primarily by privacy concerns and high costs. But many expect the use of such systems to increase as citizens appear more willing to trade privacy for security in the wake of the Sept. 11 terrorist attacks.
"Security shot up the Richter scale in terms of priorities," said Grant Evans, senior vice president of Identix, the leading supplier of fingerprint scanning hardware and software and the largest publicly traded biometrics firm. "And what it really all boiled down to was the ability to identify people."
Indeed, facial recognition systems, which key in on unique facial characteristics and compare them against a database of known criminals or terrorists, currently are being installed in several U.S. airports. The deployment of such systems in public places prior to Sept. 11 had always been met with substantial resistance from civil libertarians who fear they ultimately could be used to keep track of ordinary citizens.
Biometrics stocks take off
Meanwhile, the stocks of the few biometric technology outfits that are publicly traded have risen sharply in value.
For example, Visionics (VSNX: down $0.36 to $13.15, Research, Estimates) shares have risen more than 216 percent from their $4.27 Sept. 10 closing price. Shares of competing facial-recognition tech company Viisage Technology (VISG: down $0.22 to $9.22, Research, Estimates) are up nearly fourfold from $1.94. Identix (IDNX: up $0.13 to $7.64, Research, Estimates) shares are up about 85 percent from $4.20.
And executives from biometrics companies said the increased demand for the technology has spread well beyond the air travel industry as corporations and consumers reassess the security of their offices and homes, as well as their data, amid a heightened awareness of vulnerability.
Identix's Evans said U.S. demand for biometric access-control devices built into PC systems had gone up "several fold," in the weeks following Sept. 11.
"In Europe, people are more used to this kind of technology, and I think the United States is going to come up fast," said Michael Weber, North American sales director for Siemens Biometrics, an operating unit of German conglomerate Siemens AG.
Many European nations have been living with the threat of terrorism for years and have already learned to strike a balance between security and privacy, deploying a range of systems that combine biometrics with smart cards, which contain embedded microprocessors.
About three years ago, Siemens created its biometrics unit in an effort to better highlight its biometrics capabilities, specifically, the hardware used for fingerprint scanning. About a year ago, the company began to sharpen its focus on North America, and it currently has a modest sales force of seven, Weber said.
After the Sept. 11 terrorist attacks and the new focus on security, the company sees a fourfold increase in its total end market opportunity, Weber said.
Graham Farrell, vice president of marketing at SecuGen, a leading maker of fingerprint scanning hardware, has a different perspective on how the sudden threat of terrorism and the new focus on security will affect the total market for his company's products.
"I think its just going to grow four times faster," he said.
Other biometrics outfits participating in this year's Comdex include: Swedish-based Precise Biometrics; Cognitec AG; a German face recognition software company; and Digital Persona, a Redwood City, Calif., company that designs biometric identification systems for mainstream markets. 
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