BY | September 3, 2012

The Cupertino based tech giant has shown haste in acquiring it. But AuthenTec brings some good features to Apple before iPhone 5 release, probably later this month

Apple has initiated steps to take over the Melbourne, Florida-based -based fingerprint-authentication technology firm AuthenTec Inc. The Cupertino tech maker, as per a Bloomberg report, has agreed to acquire the firm for around $350 million. The goal of the purchase is simply to deploy its fingerprint-authentication and encryption security technologies in its flagship products like iPhone and iPad. The takeover of AuthenTec is only one of the notable takeovers Apple has made recently. Apple keeps it as a habit to acquire small firms to make its products more secure, rich and consumer friendly.

AuthenTec in a recent filing has exposed the news about Apple’s acquisition of the firm. It says that Apple has agreed to pay $8 per share. As per the pact, the iPhone maker owes the right to pay patent licenses that total as much as $115 million, notes Bloomberg. Yet, the takeover will only be finalized in the third quarter this year as AuthenTec’s stakeholders and regulators have to approve it.

It is sure that Apple takes over AuthenTec to implement its coveted fingerprint sensor technology in its iPad, iPhone and other devices. Apple’s tablet and smartphone have been recently gaining in popularity among business users. But, apart from the four-pin security code, the devices need a natural and highly safe option for security. Indeed, a fingerprint-based security technology will be an added advantage for the machines, analysts think.

“Authentication is a giant padlock or dead bolt on the front door of an iPhone and iPad,” says Sathvik Krishnamurthy as reported by Bloomberg. Krishnamurthy, the president and CEO of Voltage Security, developer of an iPhone and iPad e-mail security technology, adds that fingerprint technology is much safer for iPhone and iPad. “It’s a natural addition.”

Apple’s deal with AuthenTec may hurt many of Apple’s archrivals including Samsung Electronics. The South Korean tech maker planned to use the security technology in its devices. Nokia, Cisco and Texas Instruments are also the customers of AuthenTec. But, after Apple’s ownership, these companies – at least Samsung and Nokia – may not use the fingerprint authentication technology. Apple can thus gain impetus over its rivals with the highly credible security feature.

Samsung has quite recently made the agreement with AuthenTec to use its security technology in its new devices. “Samsung is unlikely to continue with plans to use AuthenTec under Apple’s ownership,” says Jay Chaudhry, CEO of Zscaler, reports Bloomberg. According to the Craig-Hallum Capital analyst Richard Shannon, Samsung may also consider bidding for AuthenTec, because the company also wants to upgrade security features of its handsets.

These days, mobile phones are becoming more data centric. In this stage of technology evolution, high security is essential for all. The count of people, who use Apple iPad and iPhone for business use, is on a steady raise. “Mobile devices are becoming more Internet and data centric, which means they are no different in some ways than a PC, which exposes them to risks related to security,” says Anil Doradla, who is an analyst at William Blair & Co.

As per Doradla, “by acquiring this company, Apple is basically going after the security portfolio.” Yes, Apple can stay back business users with its flagship products, providing great security. The security technologies from AuthenTec will be intelligently used by Apple in its products to attract both business users and regular consumers.

Of course, as Krishnamurthy says, security with fingerprint authentication is the best way for enhanced security. Indeed, it will be easy to press fingerprints, other than typing a long password to activate a phone. “By doing that with fingerprint authentication you have a simple way to recognize users and bypass that cumbersome process,” he adds.

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