Biometrics is here – and it’s about to break its tethers and show up in all kinds of mobile devices, from fingerprint sensors in phones and laptops to facial-recognition gear in high-end handhelds used by law enforcement.

But it’s facial recognition for consumers that has the most market potential. The key technology – the digital camera – is already in place. By 2008, analysts estimate, annual worldwide phonecam sales will reach 650 million (up from 150 million this year) and facial-recognition revenue will hit $802 million (up from $114 million this year).

That’s where Neven Vision comes in. The Santa Monica, California, startup has created the only facial-recognition software that runs on the low-cost microprocessors used in cell phones and most other consumer electronics. CEO Hartmut Neven, a University of Southern California computer scientist, aims to capitalize on the digicam growth curve. “We spent two years adapting our software to run on embedded chips,” Neven says. “We’re the only player in town.”

Neven has applied for a patent to cover the use of image-recognition software on mobile phones and has started cutting deals with various companies. Vodafone Japan and NTT DoCoMo offer wireless video-messaging services powered by Neven Vision technology. Vodafone’s MovieMask, launched in July, recognizes your changing expressions as you look into the camera and adds the appropriate special effects, like tears or sparkles. DoCoMo introduced a similar service called Face Stamp in November. Neven Vision expects at least three European cell phone carriers to make the technology a standard feature next year.

Meanwhile, the company is developing a security application that would use biometrics – facial features, skin texture, and iris pattern – to authenticate purchases made via cell phone.

And this fall, after two years of development, the company is rolling out its most ambitious service, what Neven describes as a “visual Google.” The company has tweaked its facial analysis algorithms to identify anything from a Coke can to the Mona Lisa, barcodes to kanji. By linking this object-recognition software to a database of images, Neven aims to build a search platform for phonecam users. Don’t know what something is? Snap a pic and the service sends back a match within 10 seconds.

More here.