Last week, Apple (AAPL) pretty much telegraphed the next big advancement for mobile phones to the world with patent application # 20130154031. And the world got the message. the secret is coming out.... On Wednesday, the headline at MarketWatch read, “Apple’s fingerprint reader: the secret is out.” Yes, biometric authentication is, indeed, the next big thing for mobile phones. I’ve been chronicling the progress of this "new industry" since I started Money Coaching and we are millimeters away from the critical tipping point that leads to widespread, commercial adoption. Wow! Even I AM IMPRESSED Increasing my confidence in that prediction is the latest report from Denise Culver and market research firm Heavy Reading Mobile Networks Insider, entitled Biometrics Offer Promise for More Secure Smartphones. I invite you to consider this validation of the seven factors pointed by the "experts" as driving the adoption of biometric authentication technologies… 1. Biometrics are the Answer to Security Concerns “As mobile devices, smartphones and tablets become more prolific, the need to secure them grows exponentially, and biometric authentication offers that security.” 2. Privacy Trumps All “Preventing unauthorized access to accounts and sensitive data are two of the strongest drivers in the industry.” 3. Push-Pull Adoption Forces At Work “The drive behind biometric authentication on smartphones will occur from both the consumer and enterprise… Not only will individuals begin to demand greater security for their personal devices, but enterprises will, as well.” 4. Recent Technological Advances Make Integration a Cinch “The technology that’s needed to perform biometric authentication, such as imaging and data processing capabilities, are already embedded in the phone.” “Integration will be driven by smartphone and tablet manufacturers as the technology for adding fingerprint, iris, voice and other types of biometric authentication becomes better integrated and easier to optimize for mobile devices…” 5. Disruptive Potential “The disruptive effect of biometric authentication on smartphones will be felt across many industries, from IDs and passports to website logins, anti-counterfeiting and key replacements.” 6. Phone Makers Need Biometrics to Succeed “Telecom service providers will be in a strong position for biometrics due to their need to differentiate their service from competitors and offer more capabilities through smartphone apps.” 7. Follow the Acquisition Trail “To understand just how important biometrics are to the future of smartphones, you need only look at the merger and acquisition (M&A) activity… These acquisitions are just a few of those that have taken place in biometrics, which is being viewed as a ‘not if, but when’ technology. For quite some time, the military and law enforcement agencies have been buying up biometric companies, underscoring the need to add multi-factor authentication security at many levels.” “ImageWare (IWSY) and Aware (AWRE) should now be ‘Buy’ recommendations in our portfolio.” That being said, we need to make sure we don’t overpay for either biometric company. That’s not a concern with Aware, as it’s trading well below our original limit price of $5.45. Truth be told, I’m amazed it’s trading this cheaply. Remember, it’s sitting on $3.22 per share in cash. So about two-thirds of its current market cap is based simply on the cash on the balance sheet. And yet the company is enjoying “record revenue and profitability in our biometrics and imaging business,” as management shared during the last quarterly report. It’s a decidedly low-risk way to play the inevitable adoption of biometric authentication technologies. If you haven’t done so already, go ahead and enter half of your typical position size in the stock for $5.00 or less. Before it’s too late. As for ImageWare, it’s a more speculative opportunity. But it possesses more valuable intellectual property. With shares rallying strongly, let’s go ahead and raise our limit price slightly to $2.25 to make sure newer subscribers have a chance to get a fill. I am on the road, findind new opportunities. Till next time, Money Coach
Posted on: Sat, 06 Jul 2013 16:14:20 +0000
Trending Topics
Recently Viewed Topics
© 2015