from the November 2013 issue

Berkshire Hathaway company has announced the acquisition of Lod-based Ray-Q Interconnect

Following this article we mention two most recent acquisitions of Israeli companies by foreign concerns.

Warren Buffett, one of the world's most canny investors aquired a local concern. Warren Buffett has lived up to his love for Israel's companies and his Berkshire Hathaway company has announced the acquisition of Lod-based Ray-Q Interconnect for an undisclosed sum of money. Ray-Q provides electrical interconnect solutions to military, aerospace and other industries. Financial details of the deal were not disclosed.

Buffett made a splash in the United States and Israel 2008 with the $4 billion purchase of most of the Isracar a precision tool-making company and said at the time he likes Israeli companies. It completed the purchase this year with another $2 billion payment. Berkshire Hathaway's ITT subsidiary announced on Friday it is buying Ray-Q, a subsidiary of Raychem. It provides high quality electrical interconnect solutions to military, aerospace and other high-reliability product industries, especially those in Israel, Turkey, Eastern Europe and India. Yigal Funt, Ray-Q Chief Executive Officer since 1976, will continue to direct the company, which employs approximately 70 people. At the same time Apple bought a local company. Just to remind us what it is that interests Israeli companies we publish a preview of Israeli high-tech.

Apple may buy Israeli firm that delivered Kinect 3-D tech to Redmond rival PrimeSense got the boot from Xbox One's Kinect 3-D motion controller Apple may acquire the Israeli chip design company that provided the motion sensing technology used in Microsoft's popular Kinect video game controller, the Israeli business daily Calcalist reported.

Calcalist claimed that an Apple engineering team visited PrimeSense in early July, and that the firms have been in talks since then. Although the negotiations are in early stages, an acquisition would cost Apple about $280 million, the newspaper said.

PrimeSense is best known for designing the SoC (system-on-a-chip) silicon that processes 3-D motion sensing, a gestures-based technology it licensed to Microsoft for the latter's Kinect video game controller, an important part of Microsoft's Xbox 360 ecosystem.

Microsoft has since moved beyond PrimeSense, buying other firms in the space, and will rely on those technologies as well as an amped-up in-house effort, for Kinect on the Xbox One, the company's next-generation game console.

In March 2012, PrimeSense laid off more than a fourth of its workforce, most in its Tel Aviv headquarters, presumably because of the loss in licensing revenue after Microsoft dumped it.

Apple already has multiple teams in Israel, where it employs an estimated 300 to 400 people, many of them engineers. Nor is the company a stranger to acquisitions there: In late 2011, Apple purchased Anobit Technologies, an Israeli maker of solid state drives (SSDs), for a reported $500 million. Later, Apple integrated Anobit's SSDs into Fusion Drive-equipped iMacs.

Van Baker, an analyst at Gartner, ticked off a host of possible reasons why Apple might be interested in PrimeSense, from a set-top box and the oft-rumored-not-yet-real Apple TV to 3-D gesture recognition built into Mac and iPhone hardware. "But no one knows for sure," said Baker, the refrain of any analyst trying to read Apple's tea leaves.

From Baker's perspective, however, PrimeSense's technology, at least as expressed in the original Kinect, was lackluster, making him wonder why Apple would chase the company. There's an outside chance that patents may be at the root of the pursuit, he said.

Brian Blau, a Gartner analyst who, among other things, focuses on console-based video games and virtual reality, pointed out that, for all the bells and whistles of Kinect, the technology, both software and hardware, are not terribly difficult to produce.

Reprinted from the Israel High-Tech & Investment Report November 2013

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