Apple Deals for Topsy, Primesense Could Signal a Radical Turn

Yahoo Finance

Apple’s (AAPL) acquisitions over the past few years have provided a pretty obvious roadmap of where the company was heading. But a couple of recent deals have left pundits scratching their heads.

The company reportedly paid more than $200 million for Topsy, a firm that collects and analyzes every tweet ever posted. And it acquired Primesense, the company that helped develop Microsoft’s (MSFT) Kinect motion sensor, for approximately $350 million.

Neither of these recent deals fits an obvious need. And this lack of clarity may signal Apple is about to head off in an unexpected direction. Consider what happened in 2005, when the then computer and iPod maker acquired FingerWorks, which made multi-touch devices. There was confusion around this deal as well but, less than two years later, Steve Jobs was unveiling the iPhone and its brilliant multi-touch screen.

So what could be the motivation behind these two new deals?

Apple is unlikely to start selling Twitter analytics from Topsy, and its existing mobile advertising effort, iAds, remains tiny. Adding an expensive 3D motion sensor from Primesense to the $99 Apple TV is unlikely to make that product any more appealing, either.

Lots of speculation, plenty of potential

Some speculate that Apple plans to use Topsy’s technology just to beef up Siri search results or improve recommendations on iTunes Radio. That seems pretty underwhelming for a $200 million deal. But industry watcher John Battelle sees the potential for a much deeper overhaul of the entire iOS environment.

“My guess is some kind of intelligent, search-driven interface that “understands” you, based on the intent you signal through your use of all kinds of apps – including browser apps, of course, as well as true search apps like Siri (or Google Now),” Battelle wrote on his blog on Wednesday. “This new kind of interface responds to your voice as well as your location, your history, and anything else you might willingly (or unwittingly) feed it. It will strive to always put the very thing you need at your fingertips – something that simply isn’t possible without understanding your interactions as the equivalent of …. well, a personal interest graph.”

Likewise, the Primesense deal may not be about copying the Kinect’s gesture- and voice-recognition features for an enhanced Apple TV product. The company’s products also include Capri, a three-dimensional capture and modeling system, Time tech reporter Harry McCracken pointed out. That could open whole new vistas for heads-up displays, 3D projections or other kinds of interfaces between data on a phone and the real world.

Most Apple acquisitions have been easier to explain. Earlier this year, for example, Apple bought HopStop, which made a transit-mapping app, and Locationary, which created a database of local businesses. Both help Apple beef up weaknesses in its lagging Maps app.

Looking deeper into Apple history, the company’s dealmaking often presaged major strategic shifts, beyond its acquisition of FingerWorks. The 2008 purchase of chip designer PA Semi allowed Apple to start crafting its own processors for iPhones, and later iPads. Before kicking Google (GOOG) off its default maps app last year, Apple bought up firms in the same field including Poly9, Pacebase and C3 Technologies.

Just where Topsy and Primesense will take Apple isn’t clear. But history shows it’s likely to be an interesting ride.

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