Apple’s unexpected $356 million acquisition of mobile security and smart sensors experts AuthenTec was finalized with an unusual urgency as the transaction will likely result in future iOS devices getting advanced built-in fingerprint and NFC sensors. Furthermore, it would seem Apple’s offer to AuthenTec even included an IP agreement giving Apple rights to use AuthenTec’s patents on an exclusive basis and even license them out to third-parties…
Matt Brian over at The Next Web points to AuthenTec’s SEC filing which says that Apple was the only company among a bunch of possible bidders that showed genuine interest in utilizing a new technology AuthenTec had developed.
Then, amid negotiations Apple informed AuthenTec that it would prefer to close the deal as soon as possible, citing its “product plans and ongoing engineering efforts”.
As a result of its focus on timing, Apple’s representatives also informed the Company that Apple would not participate in an auction process and would rescind its proposal if the board decided to solicit alternative acquisition proposals for the Company.
Note that this is a direct quote from AuthenTec’s SEC filing and as such is not prone to misinterpretation and second guessing.
Apple was so keen to use AuthenTec’s new technology that it wanted the company to continue development regardless of the status of the transaction:
Apple emphasized its requirement that the development of the technology would not be interrupted regardless of whether the proposed transaction was completed. On the evening of July 19, the parties agreed to the key terms of the IP agreement and the development agreement.
Another paragraph from the filing (emphasis mine):
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.
Even more interesting than that, Apple’s offer included a $20 million IP agreement that the author explains would let the company use AuthenTec patents and even license them for up to $115 million.
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.
It would appear Apple acquired both, judging by the $356 in acquisition money.
AuthenTec used to license its technology to the likes of Lenovo, Fujitsu and Dell. The company also cut a deal recently with Samsung to use its technology to bolster enterprise security in the Galaxy maker’s upcoming Android smartphones and tablets.
Perhaps Samsung would be interested in licensing this technology from Apple?
Whichever way you look at it, Apple is clearly interested in deploying AuthenTec’s smart sensors and (possibly) NFC technology across iOS devices and it’s fair to say that the company is looking beyond enterprise, if numerous patent filings (here, here and here) describing an Apple mobile payment service are anything to go by.
Are you excited about this development?
How do you think Apple could use AuthenTec’ tech in iOS devices, besides letting you unock your iPhone with your fingerprint?