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Technology Stocks : Identix (IDNX)

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To: David who wrote (11555)12/3/1998 2:51:00 PM
From: David  Read Replies (2) of 26039
 
A basic strategic choice in bio-ID is looming before IDX . . .

Report on TouchSAFE Personal in Computimes (Malaysia), December 3, 1998:

This was a short piece on the TSP, which was described as "claimed to be a state-of-the-art fingerprint verification reader specifically designed to work with PC-based desktops, laptops and servers to prevent fraudulent use of electronic data and transactions." Because of the smart card reader in the TSP, the "fingerprint template, along with other data and certification, can be stored on the smartcard giving the user mobility between different IT access points." (My emphasis).

That phrase in italics is important. It signals a strategic IDX goal -- creating a biometrics system, based on smart cards and smart card readers, that is independent of any centralized data systems. It is independent because it relies instead on public key/private key identification technology. The user's smart card simply authenticates the user to the inquiry generated at the other end of the transaction, no matter who is asking.

That is the F3 philosophy. However, it is essentially inconsistent with the IDT approach, which stores templates outside the fingerprint reader, and is based on a centralized storage scheme. The F3 choice, which is independent of API concerns, has higher upfront costs but less legacy problems in the form of obsolete data bases. It has, I think, at least a political advantage in privacy terms. However, the IDT $99 choice gets to a mass market more quickly, and is likely to bring on strategic partners more easily (i.e., Compaq and Key Tronic).

This dichotomy is going to force IDX to make some important strategic decisions in the near future. Is the company going to go with a centralized template approach (emphasizing API use and low-cost, non-CPU based peripherals) or a mobile platform approach, like the F3, or a combination? If a combination is used, what is going to happen down the road? Which gauge of track will prevail?
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