Summary:

SEC filings reveal AuthenTec was shopping around a new product a year ago and Apple was the only interested company that could afford it. After months of collaboration, Apple decided to buy AuthenTec instead. Could we see this new tech in a new product soon?

AuthenTec chip

Before Apple decided to open its wallet for mobile-security chip company AuthenTec last month, the two companies had already been collaborating on some new technology for a future Apple product. That news was teased out of a recent AuthenTec SEC filing by The Next Web on Thursday. That means we might see the product of their collaboration sooner than previously thought.

The deal for Apple to purchase AuthenTec for $356 million was disclosed quietly, through an SEC filing, on July 26. But the outright purchase of the company wasn’t the original plan, apparently. AuthenTec, a pioneer in biometric security that makes fingerprint sensors for mobile devices, had some new technology it was looking to sell to device makers. It approached several companies last year, but apparently Apple was the only one interested, according to the filing:

Late in 2011 and early in 2012, the Company [AuthenTec] discussed new technology with several leading consumer electronics companies to gauge potential market interest for such a product. For a number of reasons, including cost, Apple was the only potential customer that expressed substantive interest in pursuing further development of and a commercial agreement with respect to this technology.

Beginning late in February 2012, management of the Company, including Larry Ciaccia, Chief Executive Officer, Phil Calamia, Chief Financial Officer, and Fred Jorgenson, Vice President and General Counsel, met with representatives of Apple to discuss and negotiate the terms of a potential commercial agreement between the Company and Apple relating to the development of this new technology. These discussions continued through March and April 2012 in several meetings held at the offices of Apple in Cupertino, California, as well as telephonically.

Long story short, there was a lot of back-and-forth between Apple and AuthenTec over licensing, exclusivity, cost and other details about this new product Apple wanted to use. Then suddenly on May 1, Apple said, “what the heck, we’ll just buy the whole company instead of this one technology” (that’s a paraphrase) and offered $7 per share. Apple played hard ball too: it said if Apple couldn’t buy the company, it would also no longer be interested in the “new technology” the two were working on.

There were some other hiccups over that next month — Apple found something in the due diligence process it didn’t like — and eventually said it would rather go back to partnering on a product than buying AuthenTec. That was the beginning of June. And for the next month the product development continued.

Eventually AuthenTec resolved the due diligence matter and Apple changed its mind (again) and said it would like to acquire AuthenTec after all and the deal was done by the last week of July. The merger hasn’t been voted on by AuthenTec shareholders yet.

What’s the mystery product?

What Passbook looks like in iOS 6.

Far more interesting than the tedious negotiations of the two companies is what exactly the two were, and are, working on. As I wrote back when the deal was announced, it could have something to do with secure mobile transactions — those could include monetary payments or other personal info people want to secure, like tickets and corporate rewards cards. AuthenTec makes fingerprint sensors, but specifically, it makes a chip that secure NFC transactions.

Passbook, which is a new feature of iOS 6 that will be available likely in the next month or so, lets users keep boarding passes, tickets, coupons and rewards cards in one app. None of those allow direct access to a user’s debit or credit cards, but they can be used to make payments via stored-value cards like the kind Starbucks issues.

What this SEC filing reveals is that the two companies weren’t starting from scratch on a new product at the end of July. If they were, it would be extremely unlikely that there would be any product of their collaboration ready in time for a fall product launch. However, if this is something AuthenTec had been shopping around for the last year, then it’s extremely plausible that this fingerprint sensor, could be ready in time for a next-generation iPhone purportedly launching in a month, or a smaller iPad, also expected before the end of the year.

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