Sweden's Fingerprint Cards looks to iris, facial recognition

Fingerprint Cards AB, which provides fingerprint sensors for more than smartphone models, is delving into new domains from automobiles to contactless payment cards in a bid to contain revenue slumps from the stagnant smartphone market and falling smartphone prices.

To boost growth, the Swedish biometric authentication provider is looking to have iris, facial and other biometric modality-based solutions account for 10 percent of its sales by 2020, said its CEO Christian Fredrikson.

Of the 700 million units of capacitive smartphone and tablet fingerprint sensors (excluding that of Apple's) last year, Fingerprint Cards accounted for 40 percent on the level of original equipment manufacturer, a great majority of which being Chinese companies including Huawei and ZTE.

"We are so dependent on China that … it has been one primary hit on our business," said Fredrikson, whose company reported operating loss of 175 million Swedish Krona ($20.05 million) in the first quarter ended March.

A continued slowdown in China has dragged worldwide smartphone shipments to a 2.9 percent year-on-year decline during the first quarter, according to IDC earlier this month.

To turn around its fortunes, the firm is diversifying its portfolio by introducing alternative biometric modalities such as iris and face recognition.

"If you want to be a leading biometrics company, you cannot just rely on fingerprint sensors," he said. "Our acquisition of Delta ID－a world-leading iris recognition solutions provider－and the development of a face recognition solution should be viewed in this context."

The company is expected to roll out the first iris-recognition embedded smart vehicle late next year, although there's no timetable yet for a similar launch in China.

"The biometric vehicle solution can be applied in different ways and associated with different functionalities, such as access, personal settings such as driving positions, infotainment or mileage reporting," he said.

Meanwhile, it is also extending its fingerprint sensors－still the most common biometric modality－into new verticals such as contactless cards and door locks.

Fredrikson envisaged that biometric smart cards－with user fingerprints replacing personal identification numbers－will become the next big major biometrics market. It is because half of the newly issued 4 billion cards annually－a number that edges up 2 percent year-on-year－support both contact and contactless payments.

By teaming up with CV Microelectronic of China, the Swedish company has just unveiled the first biometric contactless smartcard reference for the local market. A real payment card would be introduced to the market next year, said Fredrikson without disclosing the partner financing institution.

According to consultancy ABI Research, the payment card is here to stay and fingerprint authentication within the card is the next natural evolution to retain convenience while increasing security.

Despite the merits, Li Chao, a senior analyst at iResearch, believed there are limited incentives for both merchants and customers in China to switch to bank cards once they are comfortable with mobile payments.

"Quick recognition codes are already commonplace and are seen as a more convenient alternative to costly point-of-sale terminals," he said.