Apple may acquire the Israeli chip design company that provided the motion sensing technology used in Microsoft's popular Kinect video game controller, the Israeli business daily Calcalist reported today.
In a Tuesday story, Calcalist claimed that an Apple engineering team visited PrimeSense in early July, and that the firms have been in talks since then. Although the negotiations are in early stages, an acquisition would cost Apple about $280 million, the newspaper said.
PrimeSense is best known for designing the SoC (system-on-a-chip) silicon that processes 3-D motion sensing, a gestures-based technology it licensed to Microsoft for the latter's Kinect video game controller, an important part of Microsoft's Xbox 360 ecosystem.
Microsoft has since moved beyond PrimeSense, buying other firms in the space, and will rely on those technologies as well as an amped-up in-house effort, for Kinect on the Xbox One, the company's next-generation game console.
In March 2012, PrimeSense laid off more than a fourth of its workforce, most in its Tel Aviv headquarters, presumably because of the loss in licensing revenue after Microsoft dumped it.
Apple already has multiple teams in Israel, where it employs an estimated 300 to 400 people, many of them engineers. Nor is the company a stranger to acquisitions there: In late 2011, Apple purchased Anobit Technologies, an Israeli maker of solid state drives (SSDs), for a reported $500 million. Later, Apple integrated Anobit's SSDs into Fusion Drive-equipped iMacs.
Van Baker, an analyst at Gartner, ticked off a host of possible reasons why Apple might be interested in PrimeSense, from a set-top box and the oft-rumored-not-yet-real Apple TV to 3-D gesture recognition built into Mac and iPhone hardware. "But no one knows for sure," said Baker, the refrain of any analyst trying to read Apple's tea leaves.
From Baker's perspective, however, PrimeSense's technology, at least as expressed in the original Kinect, was lackluster, making him wonder why Apple would chase the company. There's an outside chance that patents may be at the root of the pursuit, he said.
Brian Blau, a Gartner analyst who, among other things, focuses on console-based video games and virtual reality, pointed out that, for all the bells and whistles of Kinect, the technology, both software and hardware, are not terribly difficult to produce.
"Most of this can be produced with off-the-shelf components, or at least inexpensive-to-manufacture parts," said Blau. "In fact, some gesture recognition can be accomplished with the camera."
The current challenge, Blau added, is to miniaturize the necessary hardware -- a detection bar able to measure not only movement, but mimic depth perception -- to the point where it can be included in devices as small as a smartphone. And there, Apple has a major stake.
"Gaming is important to Apple from an iOS perspective," said Blau, pointing to the vast array of games on the iPhone's platform, and the fact that the category drives a large portion of app and in-app revenue generated by the App Store.
Both Baker and Blau mentioned another company, Leap Motion, which next week will start shipping pre-orders of its 3-D gesture-tracking controller by the same name, as another firm to watch.
PrimeSense today declined to comment on what it called rumors, but in an email reply to questions, its CEO, Inon Beracha, maintained that the firm "has by far the leading 3-D technology in the market, tier one prospects, strong revenues and a healthy cash position."
