Apple to Buy Mobile Security Company AuthenTec for $356 Million

logoReuters reports that Apple will be acquiring AuthenTec for $356 million.

AuthenTec Inc (AUTH.O), which makes fingerprint sensor chips used in personal computers, said it agreed to be bought by Apple Inc (AAPL.O) for about $356 million.

Reuters describes AuthenTec as a maker of fingerprint sensor chips. AuthenTec recently had announced a partnership with Samsung as their VPN Security provider.

ATRIX AES1750 AuthenTec
From their fact sheet, AuthenTec describes its technology:

AuthenTec's award-winning smart fingerprint sensors provide multiple touch-powered features that extend beyond user authentication to include convenience, personalization and touch control. The Company's TouchChip area fingerprint sensors and modules comply with government and industry standards and offer the ruggedness, strong security and ease of integration needed for quick and broad deployment. TouchChip sensors dramatically lower the size, cost and power of fingerprint sensors versus optical-based fingerprint solutions.

AuthenTec's "swipe sensors" is described to use sub-surface technology to read the live layer of skin beneath the skin's surface.

Notably, one sensor is marketed for use specifically for authentication for mobile wallets. Apple has been rumored to be looking into mobile payments. Their Passbook technology in iOS 6 is a first step, but Apple has yet to deploy a more full scale system. Fingerprint authentication could fit into a larger payment strategy.

SeekingAlpha had recently speculated that AuthenTech may supply security chips for the next generation iPhone.

Apple is not going to the trouble of adding a biometric sensor just so that you don't have to use a four digit password. They are adding a biometric sensor so that the iPhone can become a safe and secure payment device.

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Top Rated Comments

acidblue Avatar
155 months ago
Real stuff = Costs less

Please note that I am a professional software engineer...

It's amazing to me that hardware companies, such as AuthenTec, who produce actual tangible products are purchased for significantly less than some silly, single shot app (like silly photo apps, and wow there was a pun in there) development companies. There is so much more needed in the engineering of hardware, and the accompanying software than there is in a stupid 'social app'. Hardware companies have to deal with real world engineering, real-world supply chain management etc. Where silly little software companies can just offload all the distribution off to the cloud. An app company can make a silly picture taking app that distorts your photos and they are all of a sudden worth a billion dollars; crazy.

/rant.

But, all-in-all, it's a cool acquisition. Hopefully they do something cool with it.
Score: 16 Votes (Like | Disagree)
samac92 Avatar
155 months ago
from 9to5mac:
Just last week, AuthenTec entered an agreement (http://www.authentec.com/News/ViewNews/tabid/473/ArticleId/518/Samsung-Selects-AuthenTecs-VPN-Security-to-Enhance-Enterprise-Security-in-New-Android-Smartphones-Ta.aspx) with Samsung to implement secure VPNs for its Android hardware. Whoops.
Score: 11 Votes (Like | Disagree)
DTphonehome Avatar
155 months ago
I find it hilarious how many people think they know the cost vs. benefit of Apple's acquisitions more than Tim Cook and Co. They don't just buy up companies for no reason, and they don't waste money, but, like all things, they keep it close to the chest.

Well obviously they know what they're doing. I'm not implying otherwise. I was just hoping geniuses such as yourself would have some more insight on this than morons like me.
Score: 9 Votes (Like | Disagree)
MisterK Avatar
155 months ago
Not replacing your credit cards... you're WALLET

Apple realizes (I think) that the goal is not replacing a credit card. That's a short-sighted goal. Apple WILL replace the credit card, of course, but as a stop-gap measure. Swiping your iPhone will charge to your iTunes account, which is tied to whatever credit card you want. Eventually this middle-man route also leaves Apple to negotiate better deals or remove the credit card companies altogether and you'll not notice (or care) because the system will be the same; you'll still be charging to your AppleID. But, like I said, this is all stop-gap.

The real goal is to replace the entire wallet and maybe even my keys. Why replace the credit card when I still have to carry around my driver's license, passport, and other IDs? I'd still have to carry a wallet anyway.This is a longer term goal, but significantly better. Your phone trusting that you are you is the first step.
Score: 7 Votes (Like | Disagree)
arn Avatar
155 months ago
Please note that I am a professional software engineer...

It's amazing to me that hardware companies, such as AuthenTec, who produce actual tangible products are purchased for significantly less than some silly, single shot app (like silly photo apps, and wow there was a pun in there) development companies.
If it makes you feel any better, Instagram was purchased more for its massive number of users than its software technology.

arn
Score: 6 Votes (Like | Disagree)
Macboy Pro Avatar
155 months ago
I'd like the ability to get a fingerprint if your phone is stolen and have it reported to a database. Bet there would be a lot less stolen phones. The alternative is a remote self destruct like a James Bond Movies. (Hot Potato anyone? ) :D
Score: 6 Votes (Like | Disagree)