Fingerprint scanners: a sign of the end of growth?

Finger print scanners may have seemed high tech once upon a time, but they became commodity technology years ago. In fact, for years PC makers were adding bells and whistles, and it was around the time that they ran out of useful ideas (and added finger print scanners) that growth in the PC business seems to have come crashing to a halt.

Now the PC makers weren’t doing anything wrong — it’s just that the market had saturated and they ran out of useful things to offer, with finger print scanners being the last, mostly-useless gadget they could think of to throw in for minimal incremental cost. By when these things showed up, laptops were powerful, had lots of disk, CPU and RAM, had built-in gigabit Ethernet and Wifi, speakers and microphones, webcams, etc. i.e., quite nice machines, for not much money.

Apple just released new iPhones today, and one of them has a fingerprint scanner. I think that marks the end of growth in the smart phone hardware market, just as it did for PCs. Smart phones today are nice — high resolution colour screens, decently fast CPUs, lots of RAM and storage, WiFi, GSM, LTE, tethering, apps, music, video, document processing, GPS/navigation, accelerometers, light sensors, response to speech input, light sensors, front and back cameras, etc.

I don’t think there’s all that much left to add – just slightly better, faster and cheaper with each generation.

This is a big problem for the phone manufacturers, as their volumes will (or perhaps already have?) flat-line and their margins will compress.

The only growth left is to saturate developing country markets – China, India, etc. That won’t be easy for the major players, as China at least has quite strong domestic manufacturers who play well in a market where relationships with the telcos matter a lot and where consumers are very price conscious.

So I’ll stick my neck out and make some predictions:

  • Apple revenues will stay flat and they will become a utility, as Microsoft, Cisco and Intel have before.
  • Samsung has a bit more runway (better product mix and geographic diversity) but in a couple of years they will flat line too.
  • We won’t see any major innovations in smart phones for years.
  • Maybe others will pick up on the finger print gimmic, and maybe not – I don’t think anyone cares.

By the way, this is only peripherally an identity-related blog entry. 🙂 Finger print scanners are a biometric authentication device, so fair game. But really, it’s about the rapid maturation and saturation of the smart phone market, which is interesting in its own right.

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