Today: Apple (AAPL) officially acquires Israeli gesture-recognition company PrimeSense, but technology has other uses besides a possible iTV. Also: Yahoo (YHOO) brings in Katie Couric, Twitter falls below $40 for first time.
The Lead: Apple TV seems logical PrimeSense destination, but not only possibility
Apple confirmed Monday that it has agreed to acquire PrimeSense, an Israeli gesture-recognition company that has been a rumored target for the Cupertino tech giant for months before reports of talks between the companies last week. The company's key role in developing Microsoft's Kinect, which allows users to control the Xbox 360 with simple movements of the hands, has led many to predict Apple will use the company's technology to complete the long-rumored Apple TV, but PrimeSense was pushing in other directions that could be useful to Apple as well.
Apple confirmed the deal with its typical statement on such acquisitions -- "Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans" -- and did not give a clue about its plans for PrimeSense. A price was also not offered not confirmed, though AllThingsD reported Apple paid about $360 million and Bloomberg pegged the price as being near $350 million.
The reported price is remarkably similar to the price Apple paid in 2012 for AuthenTec, a Florida company that made fingerprint sensors. That deal became the final step for Apple toward its fingerprint scanners on the iPhone 6, released just more than a year after the AuthenTec acquisition was confirmed. If Apple is making a similar step with PrimeSense -- purchasing a company to add its existing technology to an upcoming offering -- its likely that Apple will use PrimeSense tech to its Apple TV for gesture recognition, and could signal that the rumored all-in-one television set is getting closer to reality.
"While we have not had any more evidence of an iTV coming in the next 6 to 12 months, some sort of living room appliance is in Apple's future and gesture technology could be critical," Jefferies analyst Peter Misek wrote Monday morning.
Time's Harry McCracken notes this trend, writing that Apple typically purchases "foundational technology that will help it go somewhere it's already planning to go, only quicker. However, McCracken also notes that PrimeSense has enjoyed success finding other uses for its sensors since Microsoft acquired a different company to help with Kinect technology, and Apple may have their sights set on adding the sensors to its mobile devices for other purposes.
PrimeSense sensors have been embedded in mobile devices to help them understand the world in three dimensions, which could come in handy with mapping and navigating indoor locations; Apple snapped up two companies earlier this year that were aimed at improving its maps application, and if those efforts found use for such technology, it could have spurred the company to go shopping. The ability for a device to understand the world around its user in three dimensions also could be quite useful for wearable technology, an area Apple has also reportedly been targeting.
"What happens is when you have a very good 3-D depth sensor and you're able to use that on a mobile device or in the living room, a lot of very interesting things start to happen," Creative Strategies analyst Ben Bajarin told the New York Times.
Investors seemed to like the move, sending Apple shares up 0.8 percent to $523.74 Monday. The increase also could have been the result of looking ahead, however: Apple began teasing its Black Friday sales Monday morning in some countries, and CEO Tim Cook has been talking up his company's chances of selling a lot of iPads this holiday season.
SV150 market report: Yahoo falls after Couric hire, Twitter dips below $40
The tech-heavy Nasdaq passed 4,000 for the first time since the dot-com bust Monday, but fell back down before the close in a ho-hum trading session on Wall Street. Silicon Valley stocks declined slightly as Yahoo tumbled after an ambitious content move and Twitter closed lower than $40 for the first time since joining the public markets.
Yahoo declined 0.6 percent to $36.29 after CEO Marissa Mayer announced that Katie Couric would join the Sunnyvale Internet company as its "global anchor." The move is part of Mayer's focus on original content, following the company's hire of New York Times gadget reviewer David Pogue last month."We are investing in bringing our users the absolute best content and video experiences available -- and this is just the beginning," Mayer wrote in her announcement of the move. Investors did not send the stock soaring in response to such a move because Yahoo needs to do much more to turn around a business currently propped up by the booming valuation of Alibaba, BGC Partners analyst Colin Gillis told Bloomberg News. "For the turnaround to really take hold, they need a multipronged approach beyond just being a content play," he said.
Twitter fell 4.7 percent to $39.06, closing lower than $40 for the first time since a ballyhooed introduction to Wall Street earlier this month, as analysts and investors expect the company's valuation to return to earth. Fellow social-media companies also struggled, with Yelp falling 6.7 percent to $58.20 while integrating its SeatMe acquisition, Facebook declining 3.1 percent to $44.82, and LinkedIn losing 1.7 percent to $216.62.
Google (GOOG) managed to gain 1.4 percent to $1,045.93 even as one of its most high-profile investments faced a major challenge: Mountain View-based 23andMe, founded and led by Google CEO Larry Page's wife, Anne Wojcicki, was ordered to stop selling its signature product, a personalized DNA test, by the Food and Drug Administration, which sent a strongly worded letter. Gilead Sciences (GILD) continued to gain after Friday's good news, adding 0.4 percent to $74.60, and Hewlett-Packard (HPQ) increased 0.2 percent to $25.32 a day ahead of the Palo Alto company's earnings.
Monday afternoon's earnings announcements went well for two Silicon Valley companies finishing up their first full year as members of the SV150. Workday shot 8 percent higher in after-hours trading after the Pleasanton company announced a 76 percent rise in quarterly revenues while celebrating the anniversary of its initial public offering and offered forecasts for the current quarter that went beyond analysts expectations. The cloud-software company, which also announced the addition of Yahoo co-founder Jerry Yang to its board Monday, closed with a 1 percent loss at $73.30, but shot higher than $79 in late trading. Palo Alto Networks, which went public a few months ahead of Workday, also experienced after-hours excitement following an earnings report that showed strong earnings growth; after closing with a 1.8 percent gain at $46.10, the Santa Clara security company jumped to $49 in late trading.
Up: Zynga, Nvidia, Palo Alto Networks, Advanced Micro Devices, Google, Intuit (INTU), Adobe (ADBE), Apple, Netflix (NFLX), Gilead, NetApp, HP
Down: Yelp, Twitter, SunPower (SPWRA), Pandora, SolarCity, Salesforce, Splunk, Facebook, eBay (EBAY), Sandisk, LinkedIn, EA, VMware, Workday, Symantec, Cisco (CSCO), Yahoo, Intel (INTC), Tesla, Juniper
The SV150 index of Silicon Valley's largest tech companies: Down 1.37, or 0.1 percent, to 1,404.65
The tech-heavy Nasdaq composite index: Up 2.92, or 0.07 percent, to 3,994.57
The blue chip Dow Jones industrial average: Up 7.77, or 0.05 percent, to 16,072.54
And the widely watched Standard & Poor's 500 index: Down 2.28, or 0.13 percent, to 1,802.48
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.
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