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4 minute read

How The PC Industry Failed To Best Apple (Again)

Apple's new fingerprint sensor technology isn't so new. Its competitors had been using it for years. Why couldn't they make it work?

There's a high-end smartphone that has all the hallmarks of a blockbuster device: a powerful camera, beautiful HD screen, blazing speeds. Most significantly, it features an embedded fingerprint sensor that enables users not only to lock and unlock their phones, but also to access applications and confirm mobile payments.

If you guessed that the smartphone is Apple's new iPhone 5s, however, you'd be wrong. It's actually the Regza T-01D, a Fujitsu smartphone—from 2011.

Fujitsu' Regza T-01D

Like the Regza, a wide range of dated mobile devices featured much of the same underlying biometric technology that Apple unveiled last week in its iPhone 5s. It's one of the rare instances where Apple's competitors were following the ultra-secretive company's game plan long before it was: As far back as the early 2000s, fingerprint sensors were embedded in a slew of devices, from laptops produced by HP and Toshiba to phones made by Nokia and Motorola. It was all based on technology developed by AuthenTec, the biometric firm Apple acquired in 2012 for a reported $356 million.

But while Apple was able to make fingerprint sensors feel like a fresh idea, its competitors were only capable of making the technology feel superfluous, stale, and unready for market. They were unable to take advantage of the biometric technology that Apple is making core to its latest masterpiece, either because they lacked the vision or know-how to execute on the idea properly, or because they weren't willing to risk what it'd take to market it correctly to consumers. The lack of success that device makers saw in this field is indicative of a larger problem. It's far from the first time Apple's competitors have come across as unimaginative and content with the status quo—they've lagged behind Apple in a endless number of areas, from touchscreen technology to color plastics to voice-recognition capability.

HP Elitebook 2560p

"We were talking to every major handset vendor and certainly every PC company," recalls Larry Ciaccia, the former CEO of AuthenTec. "But nobody really wanted to take the leap [with biometrics] in a big way. Everyone was waiting for the other [company] to make the move. It was incredibly frustrating for us."

In his various roles at the company since 2005, Ciaccia worked with big PC and mobile players in sales and business development, trying to get more adoption of AuthenTec's fingerprint sensor technology. There was a brief period where adoption of the company's products peaked in the consumer market, with a 20% attach rate in laptops. (Its adoption rates in the enterprise space were substantially higher.) But the technology never saw mainstream adoption and its attach rate soon sunk, according to Ciaccia, because PC makers neither marketed the tool in any compelling way nor made it intuitive for customers.

"We thought it was just a killer application: the perfect intersection of security and convenience," says Ciaccia, adding how investors would light up when they learned the technology could be used to launch applications and authenticate a purchase on the web. "But it was very under-marketed by the PC companies. I don't think I could point to a single commercial on TV that highlighted all the things you could do with a fingerprint sensor. The unfortunate reality was that average consumers were still very unaware of the feature, and even more disconcerting, many times, they were intimidated by its complexity."

Fujitsu LifeBook p7230

Worse yet, due to cost pressures, PC makers started questioning whether the end-consumer value was there, despite having invested little in the program to make it resonate with customers. "Over the last few years, we actually focused a lot on developing our own application software for both mobile and PC [devices], because we were convinced that unless the user interface could be very simple and very inviting, the adoption was not going to happen," Ciaccia says.

To be fair, AuthenTec's fingerprint sensor technology wasn't what it is today. Many of the sensors embedded in laptops and phones were swipe sensors, meaning users were required to press and drag their fingers across a small print detection surface in order for it to work. The scans were inconsistent; moreover, the sensor quality would deteriorate over time.

But that's the difference between Apple and its competitors. Where others saw an imperfect technology it could temporarily repurpose, Apple saw the long-term potential to perfect it. It was willing to gamble hundreds of millions of dollars on the idea. And while it's far from a surefire bet, the risk it took on the technology is why the public and market still see Apple as an innovator. It's no different than when Apple first developed the iPod. Remember, it wasn't Apple that developed the technology needed to make the iPod a success—it was Toshiba that created the 1.8-inch hard drive that would allow such a slim form factor. But it was Apple that recognized the technology's potential to enable mobile music consumption. Toshiba, on the other hand, had no idea what to do with the drive.

It's the reason that Ciaccia, for one, is already calling the use of fingerprint sensor technology in the iPhone 5s a "breakthrough," if only because it simplifies the experience for the average consumer. AuthenTec's former clients couldn't pull off such a feat when they had the chance, especially in the mobile space. "One of our sensors looked exactly like the square little button in the BlackBerry Bold," Ciaccia continues. "But it was all hesitation [by mobile phone companies]. Again, nobody wanted to make the leap."

Since Apple unveiled the iPhone 5s last week, Ciaccia says he's been in touch with members of his former team who are "totally excited" that AuthenTec's technology is finally getting its due. "This was our vision many years ago—that it could become ubiquitous," Ciaccia says. "A company like Apple can truly change the perception [of this technology]."

Not so for stagnant PC makers and their mobile counterparts.

Says Ciaccia, "It will be interesting to see what the other guys do now that Apple has made this move."

Perhaps kick themselves?