Apple Continues Buying Spree with Reported Purchase of Sweden’s AlgoTrim

| Analysis

The Apple Cash RegisterApple has purchased a Swedish company called AlgoTrim, according to a report from TechCrunch. AlgoTrim specialized in data compression technologies that could be useful to Apple in a number of areas, and the purchase is another example of Apple's increased acquisition strategy.

In recent months, Apple has purchased a number of mapping and transit-related companies, a low-power chip maker, and now AlgoTrim. This year, Apple is averaging more than one acquisition every month, a significant increase from prior years.

TechCrunch's Darrell Etherington discovered that Anders Holtsberg, AlgoTrim's co-founder, CEO and head of software development, has moved to the Bay Area and can be contacted through Apple's internal telephone system. In addition, the company said that it was not allowed to discuss an Apple acquisition, which has come to be seen as confirmation of an Apple acquisition.

The question is what would Apple do with AlgoTrim's people and technology. Mr. Etherington did a great job of breaking down what AlgoTrim works on—image compression and other technologies that could allow Apple to approach digital photography in a new way, as well as technologies that could help Apple's quest for processors with ever-lower power consumption.

Making all that a given, these are technologies that Apple could license all day long. Licensing was a big part of AlgoTrim's business model. Why buy when you can lease the cow for pennies on the dollar?

I was thinking of it a tad more obliquely, and that's Apple's stated goal of owning key technologies in the products it sells. This is especially true for new product categories, where owning a key technology can make a real difference on how long it takes competitors to copy Apple's innovations.

So on the one hand, Apple could have bought AlgoTrim to simply improve the cameras in its iPhone and iPads, or to improve bandwidth performance for FaceTime (or both). Apple may also be pursuing some dramatic decrease in power consumption that would allow iOS devices or its Macs to be smaller and/or have better battery life.

What's even more fun, however, is the idea that AlgoTrim's technology will be part of some future product. That could be the so-called iWatch or a new Apple TV, or it might be something we know nothing about.

Better yet, all of those scenarios could pan out. By owning such low-level technology, Apple can use it to differentiate its products and keep the competition from doing the same.

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7 Comments Leave Your Own

Lee Dronick

Yes, it will be interesting to see what Apple does with the technology.

iJack

Tim Cook mention something about data compression when he was previewing Mavericks. If memory serves (only rarely), it was in the context of open, non-active apps being put into a near-sleep state, until needed, as a tool for optimizing memory usage.  Something like that.

What’s your (brain) memory like, Bryan? Does that ring any bells?

Bryan Chaffin

Yeah, Tim or Craig Federighi talked about this, and your description was spot on. I wonder if AlgoTrim’s technology is involved? Perhaps one of the gearheads can weigh in on that possibility…

skipaq

It should be “could” rather than “cold” in the third paragraph. Unless Apple serves licenses cold or hot. wink

iJack

Human memory is a funny thing. grin

Of course, it’s a bit late in the day for AlgoTrim’s tech to impact Mavericks – at least 9.0 – since it’s due out any week now, right?

ibuck

Are AlgoTrim’s technologies to be used in Mac’s as well as iOS devices?

iJack

Ooo! Good question ibuck. Would be useful for multi-tasking in iOS 7.

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