Apple to buy mobile security and NFC chipset vendor

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Apple has agreed to pay $356 million for AuthenTec, a company whose speciality is fingerprint scanning chips that are used in PCs, although it does also make NFC chipsets and other mobile security products.

Apple has not made a statement about its motivation for the acquisition, although a document attached to AuthenTec’s 8-K filing with the SEC includes a lengthy development agreement that sets out work the vendor will do on ‘developing a 2D fingerprint sensor for Apple’. Speculation suggests this technology could help Apple provide authentication of mobile payments via a new iPhone model, expected to be unveiled in September (similar technology is already used for mobile payments in Japan).

The next version of the iPhone is expected by many analysts to include some form of mobile payment technology, given that the firm’s rivals are preparing, or have launched, mobile payment solutions. Rival Google launched Google Wallet over a year ago, and Microsoft has revealed that there will be a wallet feature on the Windows Mobile 8 operating system.

Apple has already announced the ‘Passbook’ feature in its next operating system, iOS 6, which is due to be launched later this year. Passbook is a mobile app for storing tickets, coupons and loyalty cards, but does not facilitate mobile payments. However, AuthenTec’s embedded fingerprint scanners and other identity-related software could be key to Apple’s plans to offer a mobile payment mechanism in future devices.

‘The situation with mobile money and introducing it into handsets – it’s one of those areas where carriers have felt they have an important role to play and that may turn out to be true in the long run,’ said Tony Cripps, principal analyst in Ovum Telecoms’ devices and platforms group. ‘But as I think we’ve so often seen with new technology around mobile phones, it often takes the OEMs to push something to make it happen.’

He cited the example of smartphone apps, as it took OEMs, such as Apple, to take the lead to make apps popular among end consumers. ‘Mobile money may well be one of those things. Apple is now buying its way into that area, and it’s got a huge install base to aim at.’

Cripps added that, with operators, software players and equipment manufacturers all launching mobile payment offerings, the future for mobile payments is looking fragmented.

‘It might turn out that there will have to be room for more than one [type of mobile wallet]. Microsoft, Apple and Google are at loggerheads and we may not end up with one solution; companies will be pushing their own agendas for their own reasons. That said, it would be beneficial, particular for merchants and credit card clearing companies, if the situation was simplified, but that’s not always how these things work out.’