With maturity comes a certain perspective and it’s this perspective that is fueling Apple’s (AAPL) acquisition spree. The tech giant has acquired as many as 24 companies in the past one and half years, suggesting the company is surely up to something. In my latest report on Apple I talked about the acquisition of Beats Electronics and in this report I will cover the acquisition of LuxVue.
What you need to know
LuxVue is a Silicon Valley company that specializes in manufacturing low-power micro-LED displays meant for consumer electronics. The company is a relatively new one, incorporated in 2009, and is based out of Santa Clara, California.
The startup got the attention of the industry experts when it launched a break-through technology in display. Even several VCs have been interested in the work done by LuxVue and the company has already raised funds three times - $7.5 million in August 2011, $11.1 million in November 2012, and $25.2 million in December 2013.
Apple has not been very vocal about its acquisition, but this is no surprise keeping the company’s nature in mind. Though the details on the deal remain undisclosed, the status of the company as per CrunchBase is “Acquired by Apple” and this confirms the validity of the deal. What got Apple’s attention was the break-through in display technology that the firm managed.
Usually a LED display works by emitting a bright white light and then screening out the unwanted colors for each pixel. Instead of that what LuxVue has done is they have used 2 LEDs of each of red, blue and green colors. As a result, the display is capable of providing 9 times better battery life even at high brightness levels. Prior to Apple’s acquisition, Google (GOOG) was rumored to be in the line to use this technology for its next-gen Google Glass. However, the current situation clearly suggests that’s not a possibility anymore.
Apple’s Possible Rationale
What must have caught iPhone makers attention is the nine times improved battery life at higher brightness levels. To be honest this is any phone maker’s desire to offer more juice in the device, allowing more play time for the users.
Considering the next iPhone might come with a bigger display, the power consumption is sure going to go up unless the device comes with a stronger battery. But this would also mean increased thickness of the device, which I am sure Apple doesn’t want. In such a situation acquiring a company specializing in display with better battery is an obvious decision.
Acquiring LuxVue also means Apple will not have to depend upon its rivals for the supply of the display units for the iDevices. If the company gets the displays manufactured in-house the company will also save on costs. This being so, Apple can think of not hiking the price of the next iPhone and continue to enjoy same margins.
The new displays will also come in handy with the highly awaited iWatch. As it is the device will be a very small one, automatically suggesting smaller battery. With 9 times improved battery life even a very small battery will suffice the iWatch usage. Moreover, LuxVue’s displays can be used on curved are surface, making it all the more perfect for the iWatch.
Apple is concerned about its devices losing market share and understands the need of a new gadget to regain its dominance in the consumer electronics space. In all probability it is considering iWatch to be its game changing weapon. Though Samsung (SSNLF) has already launched smartwatches, the device has not gained mass acceptance.
Apple didn’t make the first music player or the first smartphone. But, it did make the first successful music player and smartphone. Similarly, there is a very high chance of iWatch making it big despite the failure of Galaxy Gear. The company is putting in a lot of thought in making the device, trying to get the right combination of features in the right package.