This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Apple's AuthenTec Deal: A Shot At Samsung? (Update 1)

Updated from 8:50 a.m. EST to include analyst comments in the sixth and seventh paragraphs.

NEW YORK ( TheStreet) -- Apple (AAPL - Get Report) has fired a shot right at Samsung in the smartphone wars, clinching a deal to buy AuthenTec (AUTH) for a massive 60% premium, at $8 per share.

AuthenTec makes mobile and network security solutions, and recently signed a deal with Samsung to be featured in its new Android smartphone and tablets.

The 60% premium signals to investors that Apple's serious about its war with Samsung, as it tries to lock down more of the component supply chain. The ironic part of this is that Samsung is also a key supplier to Apple for both the iPhone and iPad.

There have been no statements from either company yet, save for an SEC filing before market open.

One has to wonder whether this could be a precursor for Apple's move into digital wallets, given AuthenTec's specialty.

Wells Fargo analyst Maynard Um speculates this might be the case,. "We believe this deal signals the potential for fingerprint sensors in upcoming Apple devices, which not only increases device security, but could also be a mechanism to assure security needed to execute mobile payments on iPhones. We see this as likely one of the primary reasons for the acquisition," Um wrote in a note to clients. He rates Apple shares "outperform" with a target range of $640-$660.

A recent analyst note from July also hinted at this. Craig Hallum analyst Richard Shannon, who covered AuthenTec, noted that the company was "transforming into a security solutions provider for mobile payments and the delivery of premium mobile content." He rates AuthenTec "buy" with a $6 price target.

Apple has not yet responded to TheStreet's request for comment on this story.

AuthenTec shares are soaring in early Friday trading, up 62.72% to $8.25, while Apple is off 0.36% to $572.79.

Interested in more on Apple? See TheStreet Ratings' report card for this stock.

Check out our new tech blog, Tech Trends. Follow TheStreet Tech on your wireless devices.

-- Written by Chris Ciaccia in New York

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs