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Apple ‘beat Samsung to the punch’ on AuthenTec purchase

News broke earlier today that Apple is buying mobile security company AuthenTec for $365 million. The company makes the majority of its money from fingerprint sensors and various security tools. AuthenTec also made a deal just last week with Samsung to implement its VPN technology in some of its Android devices. Many have speculated why Apple decided to make the purchase, and some point to the possibility of using AuthenTec’s technology in a future wallet solution. A report from ZDnet’s Larry Dignan offers another reason: simply to “beat Samsung to the punch.” Citing a report from analyst Richard Shannon, who recently said AuthenTec’s technology would be critical to Samsung, Dignan explained:

Shannon estimated that AuthenTec’s royalties from its VPN software was minimal, maybe a penny per unit, but would be critical to Samsung… The other wrinkle here is that Apple’s product cycles are longer than Samsung’s. As a result, Apple has to bridge device sales until its latest greatest iPhone lands in the September-October time frame every year. That sales bridge is likely to be the enterprise….AuthenTec didn’t have enough cash to be a real mobile security player. The company had $20 million in cash and equivalents on hand. Authentec couldn’t bulk up and invest if it wanted to. As a result, some partner would have acquired Authentec. Apple beat Samsung to the punch.

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Avatar for Jordan Kahn Jordan Kahn

Jordan writes about all things Apple as Senior Editor of 9to5Mac, & contributes to 9to5Google, 9to5Toys, & Electrek.co. He also co-authors 9to5Mac’s weekly Logic Pros series and makes music as one half of Toronto-based Makamachine.