A sensible exit: PrimeSense bought by Apple for $345M
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Once again Apple looks to score from a Microsoft dropped ball


Israeli gestural control technology developer PrimeSense has been purchased by Apple Inc. for $345M, according to Israeli tech site Calcalist. The news follows rumors of the pending deal dating back to mid July when the price tag was speculated to be some $60M less than the current reported amount. PrimeSense denied the rumors at the time (they must have thought everyone was asking them about the pricing).

Breaking up is hard to do

The exit is a major win for the company whose situation a year and half ago looked dismal to say the least. At that time, the Israeli startup superstar’s main benefactor Microsoft announced that it would not be renewing its contract with the company whose technology sat at the heart of Microsoft’s Kinect and Xbox gaming products. The announcement not to renew led to mass layoffs by the company as well as some serious soul searching. In an interview with Geektime, VP of product marketing for PrimeSense, Tal Dagan, sounded like someone who just found out their marriage had ended and were trying to put a positive spin on it:

“Our product has revolutionized the user experience. We are pleased that Microsoft has continued its commitment to the field, even though she has chosen a new partner and solution in place of our product. So, it’s not PrimeSense, but it shows that the three-dimensional sensor revolution is still alive and well.”

However, despite those who marked the loss of Microsoft as the beginning of the end for PrimeSense, Dagan’s indefatigable optimism turned out to be more than just the first of the five stages of grief:

“We have the most advanced three-dimensional technology. A few months ago we showed our latest generation of tech, the Capri, whose mission it is to penetrate more and more consumer devices. It’s very small, you can hold it in your hand, and you can operate it in any product that exists today; from TVs to smartphones. In addition, it get’s amazing performance, up to 3 times that of the average quality today.”

Smart and single for smart TV

Whether Dagan knew it at the time or not, the Capri’s potential applications for smart TV might have made it a very attractive shopping item for the normally frustratingly frugal Apple who’s been teasing speculators with the prospect of a revolutionary iTV for the better part of a year now.

Say what you want about the power of optimism but it would appear that the PrimeSense/Microsoft split was a major blessing in disguise for both parties. PrimeSense, whose final tally of investment pre purchase sat at $85M, will be offering its investors more than double on their return, not to mention whatever stock attachments might be coming along with the deal from the most valuable company in the world.

From Apple’s perspective, not since the iPhone has the snob of Silicon Valley had a chance to revolutionize and reinvent an entirely new medium for media consumption off of a technology that originated in Microsoft’s lap. Something tells me that for Apple, that in-and-of-itself is priceless.

Update: In a recent followup to our article, TheNextWeb contacted PrimeSense and received this official comment:

“PrimeSense is the leading 3D technology in the market. We are focused on building a prosperous company while bringing 3D sensing and Natural Interaction to the mass market in a variety of markets such as interactive living room and mobile devices. We do not comment on what any of our partners, customers or potential customers are doing and we do not relate to rumors or re-cycled rumors.”


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Avi Schneider

About Avi Schneider

Global editor and writer for Geektime, author of the book 'How To Fight For Your Goals: Social Combat Theory' and the SocialCombatMedia.wordpress blog, founder of Cluboom and former senior writer for Blonde 2.0. Schneider is an orthodox Jew, husband, father, martial artist, writer, speaker - overall Jack of all trades and a master of jack (but working on it).

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