PrimeSense Acquisition: Apple’s Positive Gesture to Future of Technology

Edited by Vani Rao
Technical Analysis by Rajiv Singh

3D sensor technology to enhance value of current product portfolio

Apple Inc.’s (NASDAQ:AAPL) $350-million acquisition of Israel-based 3D sensor company PrimeSense is seen as a positive gesture to the future of technology. This is the second acquisition of an Israeli company by Apple in less than two years. Earlier in January 2012, Apple had acquired flash storage chip maker Anobit. However, Apple’s futuristic move has made several investors and company watchers wonder how the tech giant plans to use the motion-sensing technology in its products. While PrimeSense has currently licensed its technology to Microsoft, it is not clear how the deal changes following Apple’s acquisition of the Israeli company.

Vision for the future

shutterstock_143904868Like in the past, Apple isn’t saying much about how it plans to use PrimeSense’s gesture-controlled technology. With this acquisition, Apple has at least hinted that it actually has some vision for a future other than upgrading its existing products as competitors inch closer to matching or surpassing them. As Apple is reluctant to divulge anything on its plans for PrimeSense, its strategy makes it easy for speculation to fill the factual void.

Most speculators see PrimeSense as being an asset from Apple’s alleged big plans in TV. In addition to that, PrimeSense could also greatly enhance the capability of its iWatch. PrimeSense’s technology can be an obvious asset in security, the battle for the living room, and much more.

Apple is known to make acquisitions that will help to bolster its product line-up. Apple did so a few years ago when it acquired Siri for $200 million only to incorporate it later into the iPhone 4S and create a flurry of consumer interest. Just last year, Apple bought security company Authentec for $356 million, which was needed for providing the fingerprint sensor in the iPhone 5S. Now Apple’s latest acquisition has investors and company watchers in a tizzy.

Acquisition seen to add value to Maps platform

Industry experts believe that Apple’s acquisition of PrimeSense could be a key fit for its Maps platform. Apple’s Maps platform got off to a rough start but has been improving ever since. Apple is planning to add images and contextualize locations around the US on its Maps platform, effectively warding off competition from rivals including Google. PrimeSenseis seen as a key component in these plans.

Robert Scoble and Shel Israel, who covered PrimeSense in their book “Age of Context”, euphorically talk about the potential for sensors in the home, in health, security, environmental improvements and every aspect of business. “Sensors are a key reason that our mobile devices are coming to understand each of us on such a personal level. PrimeSense is the best of the 3D sensor companies we found,” said Israel.

Apple’s iTVa potential user of3D sensor technology

PrimeSense’s3D sensors let machines see you or your general location in 3D. These devices are currently being used in Microsoft’s Kinect for Xbox 360 to understand what is going on in the living room. Its sensors can actually sense the heartbeat of players and understand whether a player is enjoying a game or not.

Apple obviously has its own plans for a stronger living room presence with its much discussed iTV, which is expected to see the light of the day by the end of 2014 or later. Picture this: A device watches you as you watch it. A device that sees how your heart beats as you watches a certain show on air. Based on what it senses, the device will be able to customize contents to be offered to you.

But PrimeSense goes further than that. For instance, a PrimeSense device watches a shopper laying his hands on a box of chocolates, the sensors in the device read his intent, and an iPad display offers him a discount on either that brand or a competing brand. It allows retailers to pinpoint marketing offers. With an intent to give ‘eyes’ to more devices globally, PrimeSense has been reducing both the price and size of its 3D sensor packs over the years.

Gesturing is the next mouse?

If one looks at the bigger picture of where the technology is heading, many tech devices are getting too small to accommodate a keyboard. Hence, sensing technology could be either used in voice-based or gesturing applications. As making gestures, like voice commands, is emerging as a foundational technology, gesturing seems to be the next mouse.

True that mouse has turned 40 and, in technological parlance, outlived its lifespan. But it would be too early to announce the death of the keyboard as an input device as of now.

Google Glass, the tech giant’s big leap into the world of wearable computing devices, uses gesturing to advance the screen but it is still in the nascent state.

While wearable computing is taking baby steps, voice recognition has made broad advances. Take the case of Apple’s Siri. The intelligent assistant is used by many iPhone owners for internet searches or to get directions. So far, mobile phones have come to understand voice commands and talk back. Now, the voice of Siri can acquire the eyes of PrimeSense, and that in itself could be a very big technological advancement.

In the future, the companies which develop devices that one can talk to or gesture at will probably be the winners in the wearable computing wars. Apple will surely be one to watch out for.

Technical Analysis on Apple

On Friday, Apple Inc. stocks moved higher to end the day at $556.07, which is 1.85% higher than the previous day’s closing price. Apple’s stocks have picked up momentum in last few trading sessions, gaining 6.17% in the last three trading sessions and outperforming the S&P 500 Index, which remained flat, up 0.18% during the same period.

Source:Bloomberg
Source:Bloomberg

Technically, Apple’s stocksare trading above its 9-day, 50-day, and 200-day simple daily moving average, implying a strong bullish trend.However, momentum indicators like RSI and William %R indicate an overbought territory for the stock and suggest a decline in stock prices in the near future. MACD above the Signal line suggests a neutral stand. WSA remains bullish on the stock in the long run, but definitely sees some pull back in near future.

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