Urgency in Apple's Talks with AuthenTec Hints at Rapid Adoption of Fingerprint Scanning Technology

[MacRumors]

Late last month, fingerprint scanner firm AuthenTec announced that it had been acquired by Apple, naturally leading to speculation that Apple is looking to include the company's biometric security technology in its products.




A lengthy report from The Next Web now takes a look at the U.S. Securities and Exchange Commission filing documenting the negotiations that led to the acquisition, highlighting Apple's sense of urgency in obtaining access to AuthenTec's technology, whether through acquisition or licensing. According to the filing, Apple and AuthenTec began discussions in late 2011, with serious talks about a potential licensing deal starting up in late February 2012.

Then the agreement shifted completely.

On May 1, Apple decided it wouldn't be satisfied with a commercial agreement and notified AuthenTec's representatives of its proposal to acquire the company instead. Apple offered a price of $7.00 per share, valuing AuthenTec at a 115% premium over the closing price of its common stock as a day previous, pricing that Apple believed "other potential buyers would be unwilling to pay."

On May 2, Apple started tightening the screws. The company believed its price was "very attractive" as AuthenTec would face challenges trying to develop new technologies for its rivals, which "have dozens of different smartphone platforms, in contrast to Apple's unique narrow product platform, which allows for unity of design in component parts across significant unit volumes."

The regulatory filing details how Apple insisted that negotiations proceed quickly due to its "product plans and ongoing engineering efforts", with Apple informing AuthenTec that it would not participate in an auction for the company due to the tight timeline. Negotiations continued under a tight time schedule, but they hit a snag when Apple discovered some unacceptable issues during its due diligence process, and discussions once again turned back to a potential licensing agreement rather than an acquisition.

[F]rom June 1 to July 3 both parties continued to "design and develop the technology for Apple and continued to negotiate to narrow the significant differences between the parties regarding acceptable terms for a commercial agreement."

If there was a sign that Apple was hell-bent on integrating the technology in its products no matter what, this was it.

Gears shifted once again in mid-July once AuthenTec reported that it had resolved the issues raised by Apple during the due diligence process, and a full acquisition of AuthenTec by Apple was once again back on the table. Negotiations over just a handful of days brought together the final package that saw Apple pay $8.00 per share for AuthenTec and make licensing-related payments totaling $135 million.

The Next Web points to Apple's urgency during the negotiations and willingness to obtain access AuthenTec's technology under whatever scenario it could achieve as reason to believe that Apple is under a very tight timeline to bring the technology to its new iOS device hardware. The technology would be a nice complement to iOS 6, serving as one component to unlock the potential of Apple's new Passbook digital wallet feature.

Throughout its meetings with AuthenTec, Apple was keen to express that work on the new technology must continue unhindered, regardless of whether it entered a commercial agreement (which involved royalties, patent licensing and its exclusive use) or it acquired the company.

Will we see fingerprint technology in the new iPhone (or iPad)? It seems almost certain.

Apple is expected to introduce the next-generation iPhone on September 12, and while part leaks seen so far have yet to reveal evidence of the incorporation of a fingerprint sensor, a number of observers have argued that the capabilities could be relatively easily incorporated into the device's home button.

Article Link: Urgency in Apple's Talks with AuthenTec Hints at Rapid Adoption of Fingerprint Scanning Technology

[AustinIllini]

All I can say is it had better be better than the early 2000 PC fingerprint scanners. Took like a half our to log in to those things because the reader was awful.

[brock2621]

Well this sounds interestings...

[miles01110]

The Next Web points to Apple's urgency during the negotiations and willingness to obtain access AuthenTec's technology under whatever scenario it could achieve as reason to believe that Apple is under a very tight timeline to bring the technology to its new iOS device hardware.

Or they wanted to move quickly so once competitors got wind of the deal they wouldn't get into a bidding war.

[Crzyrio]

Perhaps the increased front display size, is not for screen real estate

[DarkWinter]

I would be VERY surprised if this made it into this year's iPhone. Apple isn't one to rush these things...

[Truffy]

I still find it difficult to believe that Apple could get this into the product for a September announcement

[ThatsMeRight]

If the next-gen iPhone, this fall, has got a fingerprint scanner it will be an instant buy. Why? I like fingerprint scanners.

[Carniphage]

This is going to be huge.

[basesloaded190]

I picture Apple sitting across the conference table with a checkbook and pen in hand asking how much it's going to take for them to be bought out.

[shartypants]

This will be awesome!

[tootall]

Originally Posted by AustinIllini

All I can say is it had better be better than the early 2000 PC fingerprint scanners. Took like a half our to log in to those things because the reader was awful.

Agreed, I had one on a Toshiba laptop and it never really worked...

[Crzyrio]

Originally Posted by ThatsMeRight

If the next-gen iPhone, this fall, has got a fingerprint scanner it will be an instant buy. Why? I like fingerprint scanners.

I do too!!

When I was buying my first laptop I ended up deciding between an xps and macbook!

Only reason I considered the XPS, was because it had a fingerprint reader xD
Went with the macbook instead though

[GekkePrutser]

a number of observers have argued that the capabilities could be relatively easily incorporated into the device's home button.

Except the home buttons that leaked so far have been of the normal kind.. Or would they not be visually distinctive?

Not sure if I'd really use this for payment stuff though.. For unlocking my phone, sure (anyone can see my unlock code over my shoulder with minimum effort, so this would be just about as safe). But the iPhone's glass is a fingerprint magnet so it'd be pretty easy for any thief to lift a print off it and use it to trick the sensor somehow... There's been many examples of that over the years, from laser prints on overhead sheets to jelly bean fingers.

[powers74]

Originally Posted by MacRumors

and while part leaks seen so far have yet to reveal evidence of the incorporation of a fingerprint sensor, a number of observers have argued that the capabilities could be relatively easily incorporated into the device's home button.

... Which has been redesigned...

^^ Beat me to it.

[Baumi]

Originally Posted by DarkWinter

I would be VERY surprised if this made it into this year's iPhone. Apple isn't one to rush these things...

Agreed. The only way this might make sense would be if Apple already planned to include the technology pre-buyout and later decided to stop AuthenTec from doing business with the competition. I expect this with next year's iPhone at the earliest.

We might see an Apple-branded fingerprint scanner as an add-on, though.

[AustinIllini]

Originally Posted by basesloaded190

I picture Apple sitting across the conference table with a checkbook and pen in hand asking how much it's going to take for them to be bought out.

"Well, you see, I'm buying this hotel, and uh, setting some new rules about the pool area."

[RichTF]

So how would this work, can the scanner actually read through a small amount of plastic if incorporated underneath the home button? Would be interesting to see what kinda tech is involved here...

I wonder if this has anything to do with the slight change in the shape of the 'back' of the home button that the part leaks have shown (i.e.: square shape, instead of small tabs)...? It seemed like an arbitrary change, but maybe it has a purpose -- to allow this fingerprint scanner to be more easily attached... Maybe.

EDIT: Beaten to it. Twice.

[SmoMo]

Originally Posted by Crzyrio

I do too!!

When I was buying my first laptop I ended up deciding between an xps and macbook!

Only reason I considered the XPS, was because it had a fingerprint reader xD
Went with the macbook instead though

I like your story a lot, because it has a surprise ending. Like the man who made that movie where Bruce Willis was some kinda lone Ghostbuster, and that other movie where some miserable people lived in a wooden house in a field in a forest in America in THE PRESENT DAY!!!!!

Sorry, if that spoils it for anyone, oh and there is a hole behind the poster, Rosebud is the sledge, and Darth's his Dad.

[mdlee2009]

Originally Posted by Truffy

I still find it difficult to believe that Apple could get this into the product for a September announcement

Agreed. If the acquisition only went through last month then I find it very hard to believe that it would be incorporated into this year's iPhone. They initially screwed the pooch with Siri (beta) and I doubt they want a hit feature to go down in flames again.

[TMay]

Originally Posted by DarkWinter

I would be VERY surprised if this made it into this year's iPhone. Apple isn't one to rush these things...

I agree, although it sounds as if Apple and Authentec were already pretty far along with development before the purchase of the company. As the article implied (at least the one that I had read elsewhere), Apple may incorporate the sensor into the Home button of the iPhone 5 (whatever), and release the software at a later time.

I would be very happy to see this, and understand how this would be a very sellable feature in the market.

NFC on the other hand, would be useful, but from my readings, there just hasn't been enough standardization to solidify the market yet, albeit Apple is large enough to drive a standard.

[macnerd93]

I really cant see it being that useful. If someone wants your data that badly they'll be able to get it one way or another. I'd say at least 95% of the time a smart phone gets stolen not for its data, but for the device itself.

My experience with finger scanners hasn't been that good either. My dad has his own welding/engineering business and when he visits different sites which have these types of scanners on laptops and sometimes on doors cracked rough and dry hands really don't work or register properly with these scanners, its a constant problem and affects most people with this sort of job.

[nagromme]

SOMETHING that doesn’t involve passwords and security questions is badly needed. Something EASIER than passwords and security questions, yet far more secure. Sounds like just the kind of problem that many would take a stab at and then Apple would finally crack!

I hope they do, and I hope “whatever it is” becomes one of the many standards Apple has launched and then shared with the rest of the tech world to use as well.

Does the solution involve ubiquitous fingerprint readers? If so, that could be a long transition for the public as a whole. But get it started! (No, it won’t be in the coming iPhone 7. We’ve seen front, back and home button pretty clearly already.)

Originally Posted by macnerd93

I really cant see it being that useful. If someone wants your data that badly they'll be able to get it one way or another.

Yes, but that has to change!

Originally Posted by AustinIllini

All I can say is it had better be better than the early 2000 PC fingerprint scanners. Took like a half our to log in to those things because the reader was awful.

Originally Posted by tootall

Agreed, I had one on a Toshiba laptop and it never really worked...

Always wondered about those. Seemed like kind of a cool gimmick but nothing I cared about. It interests me more lately!

(Video face recognition does not. That’s been defeated easily with a photo, and you have to actually take a moment to frame the shot.)

[nepalisherpa]

Imagine a homescreen button with a built-in finger print scanner! No more slide-to-unlock and wrong passcode. Others would not be able to use your phone either without you physically being there.

[Digitalclips]

I can see one use ... anyone stealing an iPad or iPhone with a criminal record better not touch the screen ...