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Apple May Be Eyeing Vivotech

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Apple Inc. could be in the hunt to acquire Vivotech Inc., a Santa Clara, Calif.-based company specializing in contactless payments, Bloomberg News reported today.

Bloomberg attributed Vivotech’s appeal to Apple to Will Stofega, an analyst with IDC, a research unit of Framingham, Mass.-based International Data Group. Apple’s recent patent filings could signal future acquisition activity, Stofega says (see story).

Stofega tells PaymentsSource one of the things that caught his eye in the patent filing is the mention of contactless payments and financial transactions, which is "an interesting thing that kind of hasn't taken off." He speculates Vivotech might be a target because of its strong track record in developing contactless and mobile payment technology. "Everybody is waiting for this to happen; when and where and how soon is the overarching question," Stofega says.

Mohammad Khan, Vivotech president and founder, declined to comment.

More than 600,000 Vivotech contactless point-of-sale readers and Near Field Communication devices are deployed worldwide, the company says.

Apple could be interested in Vivotech for several reasons, especially if it wants to set up a payments scheme, say Todd Ablowitz, president of president of Double Diamond Group, a Centennial, Colo.-based consulting firm. Ablowitz is a former Vivotech executive.

“What’s the one thing that Apple wouldn’t have out of the gate in payments?” Ablowitz asks. “They wouldn’t have the point of sale.”

Buying Vivotech would get Cupertino, Calif.-based Apple instant access to Vivotech’s contactless reader and NFC technologies, he says. Apple’s iTunes store would serve as the “issuer” where consumers would access their funds, Ablowitz says.

Several recently unveiled patent applications indicate Apple has a comprehensive vision for incorporating NFC technology–widely considered a critical element for mobile payments–into its iPhone. Apple’s vision also has the phone initiating transactions, but instead of accessing an open-loop, general purpose card account, an NFC-ready iPhone might link to Apple’s proprietary iTunes service, largely cutting banks out of the equation.

 “If they want to build a payments ecosystems, what would be a better target?” Ablowitz says.

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