Once premium, fingerprint scanners are now a budget feature – thanks to commoditisation!

Do you remember when the iPhone 5s was launched with a fingerprint scanner? That was certainly a turning point. Well, Motorola did launch the Atrix in 2011 with a fingerprint scanner. Yet, it was the iPhone that made it a mainstream feature with TouchID. Soon there were memes of how access to the fingerprint was a backdoor for the NSA to get access to everything you do. Essentially, it was supposed to be a risk to security. For instance, in a piece for the VentureBeat, Donald Sweeney put this image that highlights the backdoor access to the NSA. [caption id=“attachment_288949” align=“aligncenter” width=“640”] The initial fear when Apple released the iPhone with a fingerprint scanner was security. Image Credit: Dylan Tweney VentureBeat[/caption] Back then, a lot of those concerns seemed valid. However, that was 2013. We’re now in 2015. In case you’re wondering, and to assuage any concerns you may have, Apple clarified that it wasn’t sharing its fingerprint database with the NSA. And over these two years, a premium feature such as a fingerprint scanner is now a part of budget devices. Take for instance the Coolpad Note 3 which offers the same function at a price of Rs 8999! Yesterday, Xiaomi launched the Redmi Note 3 with a fingerprint scanner. The effective price of the device is a fraction of what Apple charges for its smartphone. And given the history of security, the budget Chinese devices do not seem to evoke concerns around security anymore. What happened over the past two years that devices in the budget segment are now offering the fingerprint scanner and there’s no real concern around our data being compromised. We wonder how that change came into effect. Was it due to the commoditisation of the smartphone ecosystem? Or was it a function of the supply and demand relationship that requires manufacturers to pack in a rich feature set at a price that appeals to the world’s second largest smartphone market. According to JunHong Park, Analyst at S&P based in Hong Kong, “commoditisation could be a driver for further innovation, especially leading players like Apple and Samsung. In order to keep leading shares in the industry, they need to make higher investment in advanced technology and innovative software and develop next generation smart devices.” However, an interesting observation made by Park, “We think commoditisation could pose a bigger threat on Samsung than Apple mainly because of Samsung’s somewhat weaker software and brand image than Apple.” It’s only natural then, that innovation would be led by prominent brands such as Apple and Samsung, where newer features would be developed as a result of increased investment in research and development. These features would then be commoditised by budget brands. The way it stands currently, in all likelihood, these would be Chinese brands. Park adds, “In terms of customers’ perspective, emerging market customers would benefit from the value-for-money smartphones because various players are now offering fairly good value smartphones at lower price. However, for the Apple’s iPhone, selling price is likely to remain high going forward because it has a luxury goods image and its major customers are not price-sensitive.” Well, that has always been the case. So what’s different this time around? Innovation will now be pushed by the need to stay ahead of the budget offerings, which pose the threat of constantly outdoing the value battle.