AuthenTec

AuthenTec’s (AUTH) business is all about identity based security i.e. fingerprint sensors.  They sell sensor chips and software solutions for business applications, computers and mobile devices.  I am interested in AUTH because of my thesis that unlocking items with your thumbprint will become more convenient than the traditional pass code.  I also believe that as online security issues increase people will perceive use of your thumbprint is safer than alternatives like passcodes. 

 In the most recent quarter, smart sensor sales rose 9% sequentially and they specifically mentioned in their 10-Q they are starting to see the adoption of fingerprint sensors in the U.S. Smartphone market.   http://sec.gov/Archives/edgar/data/1138830/000143774911003040/auth_10q-040111.htm  (pg 20, Challenges and Risks )

With the proliferation of NFC, mobile wallets and applications using sensitive data and personal information biometrics can’t be too far behind can it?     

Here are some questions I have to challenge my thesis:

Do people really want to use their thumbprint for simple things like unlocking their phone? – It would be quicker, easier and well suited for the real-time junkie generation we have created.  

Will they oppose it because of they think the technology isn’t dependable? – The product has to be very high quality with almost no erroneous readings or it could quickly fail and be pushed away by the mass majority.  What could you do you do if you can’t unlock your mobile wallet at the store?  

 Will consumers be more concerned about protection or just being able to use their mobile wallet? – Again having a product of the utmost quality is the key here. 

In summary, biometrics like AUTH’s fingerprint sensors will become widely accepted as this technology improves and proves to people that it is dependable and easier to use.  Maybe the most powerful driver behind this trend is people fearing and believing a passcode is more vulnerable to theft than their thumbprint.  I have no position in AUTH, but may look to start one after I find evidence that they make a quality product and the mobile universe evolves.  For some basic stock information here is their Finviz link http://finviz.com/quote.ashx?t=auth&ty=c&ta=1&p=d