Apple will replace the iPhone 5 with two new devices and the premium model – the iPhone 5S – will include technology developed by an entrepreneur with strong Triangle ties.
The Touch ID key security feature gives iPhone users device-side authentication. The technology, which allows users to unlock their phones using their unique fingerprint, will also enable users to make purchases on iTunes. This mobile payment authentication process could help change the behavior of mobile device users that make mobile payments.
“We believe that technology is at its best and most empowering when it simply disappears,” said Apple spokesperson Phil Shiller.
The idea behind Touch ID is to remove the problems associated to Apple’s now old-technology of passcode authentication, which an estimated 52 percent of iPhone owners never used.
“This technology comes from their [Apple’s] acquisition of AuthenTec,” said CNET contributor Brian Tong during the CNET live show of the Apple event, “this is integrating their acquisition [of AuthenTec] into the Apple iPhone hardware.”
Apple acquired Florida company AuthenTec in a deal valued at an estimated $356 million that closed October 2012. When announced in July of 2012, the acquisition was seen as a play from Apple to gain access to AuthenTec technologies and the patents that enabled fingerprint security on hardware devices.
Given today’s announcement, it is apparent that Apple utilized the core technologies being developed by AuthenTec, and the engineering team that made the move from AuthenTec to Apple after the acquisition.
The co-founder of AuthenTec, F. Scott Moody, has ties to the Triangle. Moody received his degree in industrial engineering from North Carolina State University in 1980.
In 1998, Moody co-founded AuthenTec, and went on to lead the company as CEO, closing $70 million in venture capital funding.
“We had this dream of becoming a ubiquitous part of people’s lives,” said Moody in an exclusive interview with WRALTechWire, “when we started the company, people assumed that the applications were only for government or high technology.”
Moody later took the company public in 2007, and led the company to an estimated $70 million in revenue in 2011, though still experiencing a loss of $10.8 million, according to SEC filings.
Apple still made the acquisition bid, acquiring the company, its personnel, and approximately 200 patents held by AuthenTec at the time of the acquisition.
“We always focused on the individual,” said Moody, about AuthenTec’s core mission. The company was driven, said Moody, “to enhance your personal privacy … because it would make your life easier.”
Apple, more than AuthenTec on its own, said Moody, had the ability to make this vision possible and extend the technology to its everyday users. The decision was a simple one, indicated Moody, especially because the engineering team would remain intact.
“Not only was the technology a big part of today’s announcement,” said Moody, “but the team is still a large part of the team at Apple.”
“The engineering team is fully intact,” said Moody, “which is a real testament to the quality of the team that we had at AuthenTec.”
It’s a source of pride for all of the employees who worked on the technology, said Moody, and in many cases, their families. Moody mentioned that all three of his daughters have texted or called him about the announcement, noting that this is a really cool phenomenon.
“They’re proud to be associated with AuthenTec,” said Moody, about his daughters and his former colleagues.
“The cooler thing is, that we’re on a product that people will use every day,” said Moody. With more than 700 million iOS devices sold, Apple is looking to continue their competition to dominate the mobile phone market by adding this innovative technology.
“I loved being a part of a startup,” said Moody, “and those startup years were a lot of fun.” After the deal closed, Moody, who had moved to Melbourne, Fl., less than a month after graduating from NC State University, began looking to move.
He and his wife settled on the Triangle, which was very different since his time at N.C. State in the late 1970s. “It’s a great environment to be in,” said Moody, “and despite plans to sit back for a very long time [after the acquisition], I came up here.”
“There are probably 10 places in the US where doing a startup is not a penalty,” said Moody. “There’s engineering talent, which brings ideas and technologies, there are universities here, which bring talent, and there’s an ecosystem here that can help enable companies.”
“We did decide, of those 10 places, that this was the place we wanted to live,” said Moody, about the Triangle.
“The opportunity I saw here was to work with startups,” said Moody, “and to really help others and be in that environment.”
Moody now runs First Talent Ventures, an early-stage investment firm that focuses on extremely early companies that have IP-protected technologies, much like AuthenTec’s early days.
With today’s announcement, the acquisition of AuthenTec now appears to be a vital move in Apple’s overall strategy, and could propel the company forward as the leader in mobile phone security.
Moody’s thoughts on the future of the Touch ID technology?
“This is just the start of what Touch ID will be used for with Apple,” said Moody, “but we’ll have to see what’s next.”
