With payments players studying closely every move Apple Inc. makes, reports out July 27 that the computer giant will buy biometrics developer AuthenTec Inc. sparked speculation about the potential payments capabilities of the iPhone 5.
Reuters reported that Apple intends to buy the Melbourne, Fla.-based fingerprint sensor technology developer for about $365 million.
Because AuthenTec services Korean mobile-device maker Samsung Electronics Co. Ltd., a natural inclination may be to believe Apple intends to use the company’s fingerprint sensors in its iPhone 5 as part of a mobile-wallet configuration.
But other than Apple executives, no one can say for sure what the company has in mind for the technology that AuthenTec brings to the table. Apple did not respond to PaymentsSource inquiries regarding the reports about the pending deal.
Still, everyone who follows Apple understands certain aspects about the company, says Gil Luria, analyst with Los Angeles-based Wedbush Securities.
“What we know is that Apple is working toward a goal of adding functionality to its iPhone,” Luria says. “But they don’t necessarily have to introduce it now at all.”
Apple has a tendency to introduce technology in increments, Luria adds. “Technology that Apple bought or developed three years ago may not be introduced until right now,” he says.
It may make sense that Apple secured the biometrics-identification technology with payments in mind, but it also could be for protecting driver’s licenses or passports loaded into Apple devices, presumably as part of a mobile wallet, Luria suggests.
Apple has been collecting patents for a mobile wallet for years now, he adds. “When they do decide to reveal them as part of an iPhone, people will buy it,” Luria contends.
A connection between AuthenTec and mobile payments already exists because of the company’s work with Samsung, but guessing what Apple has in mind is difficult, says David Kaminsky, an analyst for emerging payments at Mercator Advisory Group.
“But Apple may have seen something in AuthenTec that no one else has thought of, and it could have absolutely nothing to do with payments,” Kaminsky suggests.
However, the acquisition of AuthenTec connects Apple with at least a hint of its “payments play”, he adds.
Meantime, the payments industry continues to debate the merits of biometrics in financial and retail sectors.
Apple also has created a swirl of speculation regarding its future use of Near Field Communication in its devices as it relates to contactless payments and consumer interaction with merchants.