fB

ZK Software has been in the Biometric business since 1985. How do you see the market for Fingerprint Biometrics now?

ZK

Yes, ZK started to develop fingerprint algorithms in 1985, and business operation began in 1998. During the past 20 years, we have seen ZK grow in every aspect, but especially during the past 2 years. In my opinion, the fingerprint market is booming now. In the Asia Region, the commercial market is larger, while in the USA market, government projects still occupy the major biometric market share. But in 1 or 2 years, the situation will be totally changed and the commercial civil market will be in the leading position.

fB

Can you please describe your biometric product line-up? Have you introduced any new products this past year?

ZK

Our biometric product line-up includes 3 groups. The first group includes base products, such as algorithm, license, sensor, embedded modules, etc. The second group consists of middle products such as our fingerprint embedded standalone modules like the ZEM100, ZEM200 and ZEM300. The third group includes the finished products such as fingerprint T&A, Access control, doorlock, USB and safebox. Since we are the manufacturer and have our own R&D center, we provide OEM/ODM from PCB design and molding to Linux and Windows operating system integration. We released our products F10, F4+ A11, which supports Linux, USB, web server and self-defined functions key. They are welcomed and desired by our European and USA customers.

fB

What are some of the advantages of your products versus some of the others in the marketplace?

ZK

We have 90 R&D staff at ZK and we export our products to more than 65 countries with nearly 50 million people now using ZK products. So compared with other companies -- products, our key advantages are first, our algorithm is 1:many, the speed is less than 1.5 second and the fingerprint identification speed is 5,000/second. Secondly, because we are an OEM/ODM manufacturer, we can meet customers -- customization requirements. This is a key strength. Thirdly, innovation is also a ZK advantage with a release of new products almost every 2 months!

fB

Can you describe some of these new products?

ZK

Yes, we will soon be releasing our iClock and feel that this product will change the history of the Time & Attendance industry! iClock does not require software. No matter where you physically are, you can access this clock. You can manage the clocks in difference places intensively and employees can query their attendance themselves. Users can also access weather forecasts, release a notice or multimedia news to the clocks throughout the organization.

We have also released our fingerprint embedded development platform—multimedia Linux ZEM 300 1.0 on July 1, 2006, which adopts 32 bit parallel high-speed CPU ZK6001 with main frequency 400MHZ that can be conveniently connected with TFT, USB Host, WIFI, GPRS/CDMA and such external equipments. Its identifying speed can reach 10,000-20,000/S based on the 1: many verification mode.

fB

You do a lot of work in the financial sector. Is this a growth area for ZK? Can you describe a typical deployment in this area?

ZK

Yes, in China, not all the companies have an Administration Department, so the financial areas often handles the payroll work and we provide the complete solution for such companies. We have developed an excellent reputation in this area. We also have worked extensively with the Chinese Government on projects such as society security, driver license and student examination identification projects.

fB

We are seeing significant growth in Time & Attendance applications worldwide. Can you please comment?

ZK

As everyone knows, China has large populations and each company no matter what size all need solutions to manage their employees -- Time & Attendance to eliminate things like buddy punching. ZK has secured approximately 90% of the Chinese T&A market because we provide the best solution, highest quality, best service and lowest prices. It is our goal to expand this success globally.

fB

Has this past year been a good one for your company?

ZK

Last year was a prosperous year for ZK. We were able to double our revenue over 2004.

In 2005, we sold more than 200,000 units and we are very proud to have established our support center in USA to allow ZK to continue to support our U.S. customers with the same level of service as we do here in China.

fB

How do you see the marketplace for the coming year?

ZK

We are very positive about the market in general and coming off the success that we have seen over the past year, we expect 2007 to also be prosperous year for ZK. We will be releasing many new products and solutions and have plans to make ZK a significant biometric company.

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