Tuesday, November 20, 2012

AuthenTec (AUTH) to sell embedded security solutions to Inside Secure

Mobile security solutions AuthenTec, Inc.(NASDAQ:AUTH) is selling its embedded security solutions business to Inside Secure, for around $48 million, Tech Crunch reported on Monday.

Last July, Reuters had reported that Apple Inc.(NASDAQ:AAPL) was acquiring AuthenTec for about $356 million. However this piecemeal sale indicates that Apple is interested only in other products made by the company such as its fingerprint sensors, identity management and its portfolio of patents.

The embedded security solutions business includes encryption algorithms that provide protection to mobile devices such as LG, Samsung, Motorola and Nokia.

According to NFC World Apple hasn’t yet expressed any interest in using NFC (near field communication) in its own devices. However AuthenTec uses its fingerprint sensors in a combined method with NFC for potential use in contactless payments.

Tech Crunch said that the sell-off of non-essential parts of AuthenTec’s business today probably helps Apple accomplish a couple of things. If the initial Reuters report of the acquisition remains accurate (and it should, according to government records), it recoups investment on parts of the business which aren’t essential to Apple’s plans."

The fact that Apple is buying only a part of the business also relieves its competitors about the company gaining undue control over technology which are essential to the protection of their products. This might have led to more patent wars and infringement cases.

Tech Crunch said that this acquisition would take a while to start showing benefits to the company.

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