Authentication: Apple to Buy AuthenTec

• Apple has just agreed to buy the authentication specialist AuthenTec for more than 350 million dollars; this buyout would allow them to benefit from its skills in biometric identification, as well as from roughly 150 patents (roughly worth 115 million dollars).

• The increasing competitive pressure in the mobile sector pushes the leading manufacturer into renewing its effort, all the more necessary that its shares have witnessed a slight fall (-4,3% on 25 July) and its quarterly iPhone sales have missed analysts’ projections.

• The deal still has to be approved by shareholders and regulators, and should be closed during Q3 2012. If a superior proposal (by Samsung for instance) finally leads AuthenTec to turn Apple’s offer down, it will have to pay a breakup fee of 10.95 million dollars.

Source: United States Securities and Exchange Commission

• As the gap between mobile and fixed terminals vanishes, the data stored in nomadic devices are growing more and more critical. Security efforts are key and AuthenTec’s know-how is an asset from which Apple could benefit in its mobile war against Samsung. According to IDC, these manufacturers accounted for about 50% of all Smartphones sales during Q2 2012 and legal proceedings are under way.

• Apple has already been adopted by many professionals, but could further enhance its range of offers (for iPad for instance) with this buyout, enabling companies to improve users’ sessions security and prevent data leaks in case of loss or theft of the terminals. Meanwhile it also challenges other direct rivals in business environments (including Microsoft or RiM).

• Apple may also be able to focus more on issues such as mobile payments and how to secure them. For example, last May, AuthenTec launched a new fingerprint reader designed for the m-commerce sector (see May 2012 Insight).