When Apple purchased AuthenTec back in July for $356 million, the news was a surprise to us all. Unlike most of the company’s movements, this one hadn’t been surrounded by rumor and speculation for months prior to the official announcement, and none of us saw it coming. But now it’s time to take note, because the acquisition could spell exciting things for future iOS devices.
You see, Apple acquired AuthenTec for its 2D fingerprint scanners, which it insisted it needed urgently due to its “product plans and ongoing engineering efforts.” This suggests the Cupertino company is ready to use the technology sooner rather than later — fueling speculation that it will make its debut in the sixth-generation iPhone as the perfect accompaniment to Passbook.
The Next Web’s Matt Brian has been looking into Apple’s deal with AuthenTec, and the findings are very interesting. What he discovered is that AuthenTec began offering a new technology to “several leading consumer electronics companies” in late 2011, and for several reasons — the main one being cost — Apple was the only one who was interested in it.
In fact, the Cupertino company was so interested in it that when it failed to agree commercial terms with AuthenTec in February of this year, it decided to simply buy the company instead. Brian reports:
On May 1, Apple decided it wouldn’t be satisfied with a commercial agreement and notified AuthenTec’s representatives of its proposal to acquire the company instead. Apple offered a price of $7.00 per share, valuing AuthenTec at a 115% premium over the closing price of its common stock as a day previous, pricing that Apple believed “other potential buyers would be unwilling to pay.”
Just 24 hours later, Apple had already begun “tightening the screws.” It insisted its offer was a “very attractive” one, and it persuaded AuthenTec that it would be difficult to develop its technology for Apple’s rivals, which “have dozens of different smartphone platforms, in contrast to Apple’s unique narrow product platform, which allows for unity of design in component parts across significant unit volumes.”
Apple also made it clear to AuthenTec that it wanted to use its technology, and that it needed it fast. During talks with the company back in May, Apple representatives explained the company’s desire to reach a deal quickly due to its due to its “product plans and ongoing engineering efforts.”
It’s this urgency that has led us to believe Apple has been working to integrate AuthenTec’s technology into a product that would by the end of this year.
But what is AuthenTec’s technology? A recent PREM14A proxy statement filed with the SEC reveals all — including how much Apple will be required to pay for the technology:
The IP agreement provides Apple with the right to acquire non-exclusive licenses and certain other rights with respect to hardware technology, software technology and patents of the Company for commercialization of 2D fingerprint sensors for use in or with Apple products. For the right to acquire such non-exclusive licenses and other rights, Apple will pay us $20.0 million. Apple will have 270 days from the date of the IP agreement to choose, in its sole discretion, to license certain hardware technology and patents and certain software technology and patents from us on a perpetual, non-exclusive basis for an aggregate sum of up to $115.0 million. Apple can choose to acquire either the non-exclusive hardware technology and patent rights ($90.0 million), the non-exclusive software technology and patent rights ($25.0 million) or both.
The question now, of course, is what Apple will do with those fingerprint sensors. Offering “hybrid fingerprint matching, AES, RSA and SHA encryption blocks, and One Time Password (OTP) generation,” the sensors could be an ideal companion for Apple’s new Passbook app, which will make its debut in iOS 6.
The sensors are so small that they could be integrated into a home button, and could prevent your Passbook cards from being used if your iPhone makes its way into the wrong hands.
It’s also likely that the technology will make its way into other iOS devices, and even into Apple’s Macs. AuthenTec has been building desktop fingerprint sensors for many years, and so it wouldn’t be surprising to see future Macs that allow you to login simply by swiping your thumb, rather than entering a password.
The Next Web’s report goes deeper into the deal between Apple and AuthenTec, and how the technology could be utilized in future Apple products. If you’re interested in those, it’s well worth a read.
Source: The Next Web.