Apple buys Israeli motion sensor maker PrimeSense

Speculation about iPhone maker’s plans for the living room

Apple has acquired PrimeSense, an Israeli technology company best known for providing the motion-detection software in Microsoft’s gaming sensor Kinect, in a deal that will spark fresh speculation about the iPhone maker’s plans for the living room.

Apple confirmed the deal on Sunday after reports in the Israeli press. One person familiar with the terms said it had paid $360m.

“Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans,” an Apple spokesperson said.

The Tel Aviv-based company produces three-dimensional sensing and machine-vision technology that enables consumer digital devices to “see” the environment around them.

PrimeSense supplied the Kinect technology used in Microsoft’s Xbox 360, launched in 2010, which allows users full-body interaction with the device without holding anything in their hands.

According to Inon Beracha, the Israeli company’s chief executive, the device has sold more than 26m units to date, making it the “most sold computer division device ever”.

Kinect allows people to play video games without needing a joystick, as they control their onscreen character simply by moving their body. It also enables voice or gesture control of television or video, leading some observers to speculate that Apple might use PrimeSense’s technology as part of its own television set, which has been rumoured to be in development for several years.

However, rather than working with PrimeSense again, Microsoft developed its own technology for the latest version of the Kinect sensor. The upgraded device was included in its Xbox One console, which sold 1m units in 24 hours when it went on sale on Friday.

“We are not the first company doing 3D sensors,” Mr Beracha told the Financial Times last week, before the acquisition was announced. “We were able to take it from theory to practice to mass production.”

The company was founded in 2005 by five partners, mostly from a defence background; Mr Beracha joined as chief executive in 2006.

Another of PrimeSense’s products, Capri, is a sensor designed to be embedded inside tablet computers or mobile phones themselves, offering “device to environment” interaction, allowing the device to scan things and reproduce them using a 3D printer.

Apple rarely makes large acquisitions, despite holding about $130bn in cash, net of debts. In October, Tim Cook, Apple’s chief executive, said it had bought 15 companies in the financial year ending in September, several of which have not been disclosed.

One recent deal of a similar size to PrimeSense was in July 2012 when it acquired Florida-based AuthenTec, which makes fingerprint-scanning technology, for $356m. The same technology was later employed in the new iPhone 5s, released in September this year.

In January last year, Apple acquired Anobit, an Israel-based maker of flash memory technology.

The PrimeSense deal is the latest of a string of high-profile buyouts by Silicon Valley companies of Israeli tech start-ups. In June, Google bought the navigation app company Waze for a reported $1.1bn. Facebook last month bought Onavo, another Israeli start-up, for a sum reported at more than $150m.

An earlier version of this story mistakenly said that AuthenTec was based in Israel, rather than Florida.

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