Bio-Key acquires S.I.C., hopes to tap mobile phone fingerprint market

On Monday Bio-Key International, Inc. announced that it had signed a letter of intent to acquire S.I.C. Biometrics Inc., a manufacturer of a plug-in biometric fingerprint scanner for mobile phones.

The acquisition leaves Bio-Key International in position to tap into the lucrative mobile biometric market, especially for Apple products. Montreal-based S.I.C. Biometrics developed one of the first fingerprint readers for the Apple iPhone, iPad, and other mobile devices as well as biometric proximity cards, and access control solutions.

Apple’s iPad is dominating its competition, and the company states that 60 percent of the Fortune 100 businesses are using the device. J. P. Morgan projects that Apple will sell 31 million iPads in 2011 alone, with that number growing to 48 million next year.

“As we considered a potential acquisition it was vital to understand the size and scope of the marketplace moving forward. Upon reviewing the analysts’ reports it became clear that the market for advanced mobile devices, and the Apple iPhone and iPad in particular, are positioned to generate substantial revenue streams. Ultimately, if we can capture even a small segment of the Apple device market, we believe that the impact to BIO-Key’s bottom line would be quite significant,” said Cecilia Welch, BIO-Key International’s chief financial officer.

Charlie Wolf, an analyst with Needham, anticipates that by 2020 the entire tablet market will be 223 million units with Apple owning 60 percent of the market. Meanwhile the iPhone is also projected to be a substantial market with more than 90 million units sold in 2011.

“Both the iPhone and iPad version of BIO-key’s enterprise application platform including the PIV-certified iFMID S.I.C. snap-on fingerprint readers are available today and can be easily integrated into any existing application adding strong authentication and identification to replace or augment less secure passwords or pins,” stated Mike DePasquale, BIO-Key’s CEO. “Later in the year, a consumer version of the S.I.C. device for the iPhone and iPad including a wrap-around case and integrated finger scanner is expected to become available for sale at popular retail locations. Also, we will now offer a complete line of access control products for entry as well as time and attendance. One notable option is a fully integrated industry standard proximity card that includes an onboard finger scanner eliminating the requirement for expensive card readers to be located at points of entry.”

The acquisition is expected to be completed in the fourth quarter of this year, but may be delayed due to regulatory approvals and customary closing conditions.