UK-based chipset designer ARM Holdings established a joint venture with Gemalto and Giesecke & Devrient to speed the adoption of common security standards for mobile devices.
ARM said it will own 40 per cent of the venture, which is unnamed but will be based in the UK. ARM will also be providing engineers and a small marketing team, according to the Wall Street Journal. The French digital security company Gemalto and the German-based SIM card developer Giesecke & Devrient will each hold 30 per cent and contribute operating systems, patents and engineers.
The new company will be headed by ARM executive Ben Cade with an initial staff level of around 80 once it is given the go-ahead by regulatory authorities in the European Union.
ARM, which designs the microprocessor architecture that is found in the majority of smartphones and tablets, said the new joint venture will develop security software that integrates closely with ARM-based processors, sitting between the processor chip and mobile device operating system. The new software will be designed to make online transactions safer and easier for consumers and businesses to use.
"The venture provides the linkage between hardware with the right security built in and the service provider ecosystem that really wants to make use of that but doesn't want to deal with the diversity and difference between all the platforms," Cade told Dow Jones Newswires. "The idea is to the deliver the services you as a consumer want on any devices you want."
However, news of the joint venture was given a half-hearted reception by analysts from Numis Securities, an investment bank and brokerage firm in London, claiming that, while the venture is interesting, the mobile payments market isn't fully developed yet. "In order to drive penetration, you need to be 100 per cent sure that [mobile payments] are secure," Numis told the Wall Street Journal.
Analysts also think venture is following the strategy adopted by Intel with its $7.68 billion acquisition of security-software provider McAfee, that resulted in the chip vendor releasing its DeepSAFE security product that also sits below the operating system.
"This is an absolute defensive move against Intel, and what they're doing with McAfee," Patrick Moorhead, an analyst at technology research firm Moor Insights & Strategy, told Dow Jones Newswires. "ARM is playing catch-up here."
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