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Is Apple Really in Talks with PrimeSense?

November 19, 2013 | About:
Neha Marwah

Neha Marwah

Apple (AAPL) is again under speculation, as the tech giant is said to be in acquisition talks with chipmaker PrimeSense Inc. according to a person who requested anonymity. According to the person the two companies are negotiating over the deal where Apple is working on striking the transaction for $345 million.

News regarding Apple’s interest in the chipmaker was first reported by Calcalist, which is an Israeli newspaper. The Cupertino company is known for buying lesser known companies that have developed technology which could be used in future innovative products. The company’s Chief Executive Tim Cook said that Apple acquired 15 companies in the last fiscal year.

Both the companies declined to comment when asked.

So What Does PrimeSense Do?

PrimeSense is the company which made motion-tracking chip for Microsoft (MSFT)'s Kinect video game console. The company’s technology enables digital device to identify objects and movements. Thereafter the technology converts them into color and depth. Microsoft terminated its partnership with PrimeSense once it built its own technology for the Xbox One.

The Tel Aviv-based company is building a depth-sensing technology which will allow applications such as indoor navigation tools or 3D shopping catalog in a mobile phone.

The iPhone maker bought another chip company, Passif Semiconductor, in the current year. Apple is not the only tech giant trying to connect to a motion tracking company. Fellow rival Google (GOOG) recently acquired a motion tracking software company Flutter. Even Hewlett Packard (HPQ) has partnered with a start-up tech company, Leap Motion, to incorporate wireless technology in computers.

The official agreement between the two companies is expected to get confirmed in two weeks' time. Industry observers and analysts are pretty excited with the move that Apple has taken to purchase the motion sensing tech company. People are wondering what the iPad maker is coming up with next. Where will it put to use the motion sensing technology in its offerings?

Several analysts believe that Apple would use such high tech parts in its highly speculated about and awaited HDTV. Wireless control over machines is increasingly becoming popular. For instance, Samsung introduced a feature in its Galaxy S4 wherein a video would pause if one looks away from the display. In 2011, Google also came out with the facial recognition specification while unlocking the screen of a device.

The Bottom Line

Some people also feel that the purpose for buying PrimeSense is to own its patent. Some sources say that discussions are still continuing between the two parties. The only issue that the two companies are caught in is with respect to individual liquidity. What remains to be seen is if such talks between the two companies mature, what would happen? If Apple actually buys the chipmaker, how the former would use the latter’s technology to enhance its premium offerings?

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