Apple Acquires Mobile and Network Security Firm AuthenTec

On July 27 Apple acquired AuthenTec, who provides encryption technology, fingerprint sensors and identity management software, for $356 million. After filing a shareholder notification document related to this acquisition with the SEC it was apparent that Apple was in a hurry to acquire the company’s fingerprint scanning technology, and while this has many potential uses it could be a key differentiator for mobile payment security.


Apple’s acquisition of AuthenTec didn’t make major headlines right away in late July, but after filing documents with the Securities and Exchange Commission (SEC) about their acquisition of AuthenTec in mid-August it became clear that Apple was seeking to reserve rights for the “commercialization of 2D fingerprint sensors for use in or with Apple products,” as stated in the SEC filing. Apple originally planned on only purchasing license rights with respect to the 2D fingerprint sensors and discussions began in late 2011. It was shown in the SEC filing that Apple changed their approach and made an offer to fully acquire the company in May, 2012 while also citing a focus on timing, signaling Apple wanted to begin incorporating the technology as soon as possible.


Apple recently announced their new eWallet Passbook which will be in the next iPhone and next generation of iOS, and there are also consistent rumors of the next iPhone including Near Field Communication (NFC) technology. The AuthenTec acquisition and focus on quickly acquiring the rights to their 2D fingerprint scanning software has only increased speculation about Apple’s plans for mobile payments. Adding fingerprint scanning security technology for use in or with Apple products could become a crucial differentiator for Apple products overall, but also has specific uses for mobile payments. Requiring a fingerprint to unlock an iPhone is a great security feature, and again requiring a fingerprint to unlock a mobile wallet is a feature where Apple can beat their competitors to the punch. This has the potential to be a real game changer as it could make biometric authentication for point-of-sale transactions viable and inexpensive.


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Why Apple really bought AuthenTech: It wanted “new technology” for upcoming products, and quickly