Apple to buy AuthenTec for $356 million

[Steve williams]

(Reuters) - 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.

Apple's $8 per-share offer is at a premium of 58 percent over AuthenTec's Thursday close of $5.07.

 

[amirm]

That's an odd acquisition. Wonder what is motivating it.

 

[JackD201]

Replace swipe gesture and password entry with a biometric scan perhaps? That should knock of a few seconds per use aside from the added security. Question is why buy when you can license?

 

[Keith_W]

Maybe Authentec is sitting on a bunch of patents which Apple can use to start a new round of litigation?

 

[Steve williams]

there goes Keith with that Apple bashing again

 

[amirm]

Replace swipe gesture and password entry with a biometric scan perhaps? That should knock of a few seconds per use aside from the added security. Question is why buy when you can license?

That was my question. With Siri they made voice recognition hip again. Maybe they have an angle here we don't know yet.

 

[JackD201]

Maybe Apple is so big now licensors are charging so much it makes more sense to just buy 'em out. Does anyone know what patents AuthenTec holds? If they are hardware patents it makes more sense, in particular something that can be integrated into a touch screen display. It could potentially shut out the competition for that feature. It would also be an answer to things like the Galaxy's face recognition turn on feature without being a copycat.

 

[rblnr]

Whether for patents, the synergies of putting all development under one roof, not being at the mercy of any supplier or whatever else, they keep acquiring more stuff they used to outsource. The Nortel patents, a couple of map makers (the fruits of this to debut with IOS6), the nuance/Siri purchase for voice, PA Semi and another semiconductor design group facilitating the design of proprietary chips, this security purchase and probably a few I'm not thinking about -- if nothing else, they can totally customize each element from the ground up which will help keep iOS/iDevices unique in functionality -- something hugely important for Apple.

Five years it seemed OK to use Google as their map database -- it's easy to see what a problem that could be on many fronts now. Will be interesting to see if Apple sticks with Samsung as a manufacturing partner.

 

[amirm]

There are examples and counterexamples for this. So many companies have failed for example in trying to produce their own microprocessors. Indeed, there are no examples left of any company doing that anymore. Apple is the only one right now. The issue is that a company like TI can do R&D on behalf of a number of companies and hence can spend more $$$ on it. Intel is a great example of this on the PC side. Time after time has shown that Intel can outspend others trying to compete with it.

The other side of the coin is that by taking out the middleman you can save money and Apple has plenty of volume to support that. As long as stock price keeps going up, they can attract the designers. If that ever stops, the brain drain in silicon valley is swift as folks chase the next company that is going to make them rich. Or at least rich enough to pay your huge home mortgage there .

Personally I rather see them invest in other areas than buying this kind of company. Wonder if Jobs would have been supportive of acquisitions like this.....

 

[rblnr]

Interesting points Amir, and getting it all to work while maintaining a high level of innovation will be the determinant of Tim Cook's legacy I think.

He's admittedly not a design visionary (or however you want to put it), but Apple seems to have at least a few of those. Cook, may however be a genius at management and execution -- we'll see.

Would be very interested to hear your thoughts on Ballmer sometime.

 

[Keith_W]

There are examples and counterexamples for this. So many companies have failed for example in trying to produce their own microprocessors. Indeed, there are no examples left of any company doing that anymore. Apple is the only one right now.

Are you sure they are the only ones? The Apple iOS chips are manufactured by Samsung. Needless to say, Samsung also design and manufacture their own chips. Then there's also Intel, AMD, Qualcomm, TI, and NVidia.

 

[amirm]

Are you sure they are the only ones? The Apple iOS chips are manufactured by Samsung. Needless to say, Samsung also design and manufacture their own chips. Then there's also Intel, AMD, Qualcomm, TI, and NVidia.

Apple bought the company designing the chip. They outsource the manufacturing ("fabless design"). That's why I talked about how long they can keep that talent. If they leave, which will happen once their stock options mature post acquisition, then they will have tough time competing. As it is right now I thing the quad core merchant suppliers have pulled ahead of Apple's dual core designs.