Apple Takes Huge Step to Augmented Reality with Acquisition of 3D Gesture Motion Control Focused PrimeSense

By Tony Rizzo November 25, 2013

A likely marriage between Apple and Israel-based 3-D sensor technology vendor PrimeSense has been in the media dating back to July of this year. The on-again, off-again nature of "Will They or Won't They" has alternatively seemed both real and less real. In fact one can say it's been a kind of augmented reality conversation. In part, Apple itself has a number of gesture-based, augmented reality patents of its own so one had to wonder if it really needed to make such an acquisition. Or perhaps PrimeSense was simply holding out for more dollars.

In any case, the speculation essentially ended last week when news began to emerge that the two companies had finally come to terms and that Apple would indeed do a little M&A with PrimeSense in the neighborhood of $345 million. For Apple it would be another of its "small, technology tuck-in" acquisitions.

We held off discussing it last week simply because we were not convinced the deal itself would be pulled off or finalized. But, the final pieces are all now in place and today it became official that Apple has indeed reached an agreement with PrimeSense. The final price tag came in at "around" $365 million according to the Wall Street Journal, not an insubstantial $20 million increase from the original rumor numbers from last week. PrimeSense has raised about $80 million Silver Lake Sumeru, Canaan Partners, Gemini Israel and Genesis Partners - these companies will see a very nice return on their investments.

Apple issued its standard comment on the deal: "Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans." We certainly expected nothing more than this from Apple itself. It will probably be a year or so before we begin to understand how PrimeSense fits into Apple's plans - it isn't only about the possibilities of an augmented or virtual reality game console, it certainly isn't only about manipulating a smartphone or tablet screen (but see our discussion of a recent Apple patent on such things), and it certainly isn't only about wearable tech-centric stuff such as manipulating a smartwatch.

There are no doubt many possibilities here - some will extend to the automated home we believe, some will involve tablets and game controllers possibly associated with an Apple TV, and some may very end up being tied to Apple's new Mac Pro (you know, that new little cylinder that represents Apple's most powerful desktop experience) and myriad professional uses. We view it as both a business and consumer set of possibilities.

In fact it will likely manifest itself along the same lines as the first fruits of Apple's AuthenTec acquisition - which has made its first appearance with Apple's iPhone 5s scanner primarily as a consumer-focused effort. But there is lots of enterprise possibility there as well we haven't heard about yet - possibly in the form of a super iPad for enterprise use (or for consumers that crave the highest of the high end in tablets) that may appear next year.

To be sure, the game console conversation is a hard one to resist. PrimeSense is the vendor behind the technology that powered Microsoft's first generation of Kinect and that allowed Microsoft to deliver on wireless 3D gesture controls for Xbox games. It is worth noting that Microsoft's next generation Xbox One/Kinect technology uses Microsoft's own sensor technology, so we need not think about Apple cutting Microsoft off in any way.

Since that initial use with Kinect PrimeSoft has also developed its own next generation sensors, which are designed for very small form factors - so tablets, iPhones and smartwatches are clearly part of the discussion as well for where Apple is likely to go with the technology. Below is an interesting image from one of Apple's patents on 3D gesture controls (a tip of the hat to, that shows some other possibilities - for us this one smacks of enterprise use, but perhaps it also visualizes a home-based game controller.

Other vendors - Microsoft as already mentioned, certainly Samsung, Leap Motion and other startups such as Thalmic are all working on similar technologies. Clearly augmented reality is a next step - some will involve wearable tech, some will involve the enterprise and some will find its way into the connected home.

We have a lot to look forward to!

Edited by Cassandra Tucker

TechZone360 Senior Editor

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