Could the purchase of a security firm give Apple products better security? (Photo : Reuters)
Technology giant Apple has purchased a security hardware and software maker in a deal that could potentially provide its products with improved privacy and authentication features.
The purchase of AuthenTec, a company that specializes in fingerprint security, was for $356 million. Both companies have not publicly announced the deal, but it was revealed by AuthenTec when they submitted documents to the Securities and Exchange Commission (SEC). The SEC will go over the agreement for regulatory approval as AuthenTec is a public company.
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If approved, Apple will become the parent company of AuthenTec.
AuthenTec is a Delaware-based company known for its fingerprint devices for both commercial and governmental use, and one of its customers include Apple's rival Samsung. Another customer of AuthenTec is Hewlett-Packard, which offers some of their notebooks with a fingerprint scanner.
In the SEC filings, it is noted that Apple will be utilizing the fingerprint company for its products, such as the iPad and iPhone. The agreement is also specific as to what rights Apple will have once the purchase of the company is completed.
A statement in the filings state, "All right, title and interest in and to all Project Work Product and all Intellectual Property Rights therein or thereto, will be the sole property of Apple."
The deal could give Apple another boost in the securities market, as William Blair & Co. analysts Anil Doradla told Bloomberg, "By acquiring the company, Apple is basically going after the security portfolio."
The acquisition could have AuthenTec give Apple many of its patents for mobile security. The use of AuthenTec's patents could give Apple an advantage against mobile rival Samsung. Apple is paying $20 million to a number of AuthenTec's patents, with but will have to pay a heavier fee for other patents.
According to the SEC filing, "For the right to acquire such non-exclusive licenses and other rights, [Apple] will pay [AuthenTec] $20.0 million. [Apple] will have 270 days from the date of the [Intellectual Property] Agreement to choose, in its sole discretion, to license certain hardware technology and patents and/or certain software technology and patents on a perpetual, non-exclusive basis for an aggregate sum of up to $115.0 million."