Analyst: Apple May Be Entering TV With PrimeSense Buy


In a recent note to investors, Wells Fargo analyst Maynard Um examined the implications of Apple’s (NASDAQ:AAPL) acquisition of 3-D sensor technology company PrimeSense. According to sources cited by AllThingsD, Apple purchased the Israel-based startup on Friday for about $360 million.

Like many other industry watchers, Um believes that Apple will utilize PrimeSense’s 3-D vision and gesture control technology for a television-related product. “PrimeSense develops 3D motion sensors technology utilized across entertainment, retail and robotics,” Um wrote in a note obtained by Benzinga. “We view this acquisition favorably as we’ve long held the belief that gesture and voice will be the new interfaces to television as alternatives to the remote control and Apple was lagging behind its competitors Samsung (SSNLF.PK) and Microsoft (NASDAQ:MSFT) in this respect.”

As noted by Um, Microsoft switched to its own technology for the Xbox One Kinect motion sensor. However, it previously used a PrimeSense chip to power the Xbox 360 Kinect device. Besides allowing users to interact with various video games, the Kinect device also allows Xbox users to change channels using gestures. Um thinks that Apple will likely implement PrimeSense’s technology in a similar fashion.

Still, the Wells Fargo analyst is not sure if this technology will be used for Apple’s existing Apple TV device or saved for an upcoming Apple television set. “We believe the announcement may be an indication that Apple is in early preparation for a television offering or material functional improvements to its current Apple TV offering,” wrote Um, via Benzinga.

“However, we continue to expect that a television, if indeed the route Apple chooses, is unlikely in 2014,” the analyst added. Um’s Apple television launch timeline contradicts recent predictions from market research firm DisplaySearch. According to DisplaySearch analyst David Hsieh, Apple will likely launch a so-called “iTV” in the third quarter of 2014.

Whether or not Apple unveils a television set next year, Um seemed to believe that the acquisition of PrimeSense was a positive step for Apple. The Wells Fargo analyst reiterated an Outperform rating on Apple’s stock. Here’s how Apple has traded over the past week.


Follow Nathanael on Twitter @ArnoldEtan_WSCS

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