Apple hopes to implement NFC technology in new iPhone. (Photo: Flickr / davidchief)
Friday, Apple agreed to purchase the fingerprint sensor technology developer, AuthenTec Inc., for approximately $356 million. The tech giant bought the company for 58% over market price. Even with Apple paying such a high premium for AuthenTec Inc, analysts said that the purchase didn't break the bank for Apple, with their $117 billion in cash reserves.
According to reports, this deal was made to increase security for the iPhone, which will soon be enable to make payments for users.
MSNBC reports that "some analysts expect the next version of the iPhone to include some form of mobile payment technology."Â The technology they're referring to is called NFC, or Near Field Communications. NFC will enable the iPhone to send secure data, i.e. credit card information, on the behalf of users to make purchases. While NFC technology has blossomed in countries like Japan, Apple hopes to bring NFC services to the United States, where they have been slow to develop.Â
As an new feature in iOS 6, Apple introduced the Passbook app, where users can store airline tickets boarding passes and movie tickets. Many analysts have said that the Passbook app in the new iPhone iOS 6 was Apple's first step in introducing a new form of technology for iPhone users. Google has implemented a similar strategy with Google Wallet, which allows Android users to make purchases with their mobile device. However, as previously mentioned, Google Wallet and other NFC devices hasn't been that successful.
One of the big problems with NFC technology is the increasing amount of security concerns users have. Analyst Charlie Anderson, says, "To have security behind it would give people peace of mind. It could be a major differentiator for them."Â
Also, users have said that they trust fingerprint authentication more than just password protection. BWS financial analyst Khorsand Hamed agrees, saying, "If you're storing credit card information in your phone for mobile payments, it would be more secure if it has fingerprint authentication rather than just a password protection."Â
AuthenTec technology can also help prevent iPhone theft, which has been a big problem for many users. Analyst Collin Gillis said, "If they could have a way where they could tie the phone to a user more tightly, that would make sense for them."
With NFC Technology on the horizon, it makes sense that Apple would buy AuthenTec Inc. to increase the security for iPhone's. Even though NFC technology hasn't been popular in the United States, it's clear that Apple has a unique way of making underrated technology immensely popular. For example, Microsoft has been implementing tablet technology for ages and launched a few failed products, yet Apple was the company to break the barrier and make tablet technology popular. A USA Today article that discusses Microsoft's history with tablet technology, agrees, saying, "The company that finally cracked the tablet code in 2010 was Apple, not Microsoft. Apple made the iPad a success by scaling up a phone rather than scaling down a PC, which is what Microsoft had been trying to do with the Tablet PC and Origami. Phone chips are cheap and last much longer on batteries, which meant that the iPad was both light, inexpensive and had good battery life. In addition, the iPhone software it used was designed from the ground up for touch input."
Hopefully, with the addition of AuthenTec Inc., Apple can make NFC technology popular in the United States.
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