ARM, Gemalto and G&D tie up on mobile security

LONDON Tue Apr 3, 2012 8:11am EDT

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LONDON (Reuters) - British chip designer ARM Holdings (ARM.L) said on Tuesday it was linking with smart card maker Gemalto GTO.PA and German technology firm Giesecke & Devrient to increase security for services running on smartphones and tablets.

The companies said the joint venture would drive adoption of a common security standard in mobile devices, such as smartphones using Google's GOOG.L Android operating system.

ARM's Chief Executive Warren East said up to now the integration of the hardware, software and services necessary for system-wide security had been too slow.

"I am confident that this new joint venture will accelerate the adoption of a common security standard, enabling a vibrant ecosystem of secure service providers to emerge," he said.

Users of the platform could range from banks developing mobile payment applications to Hollywood studios delivering video-on-demand, he said.

ARM, which designs the chips used in nearly all the world's mobile phones, said the companies would each contribute assets to the new venture, including patents, software and people.

Amsterdam-headquartered Gemalto makes chips for debit and credit cards, while G&D's secure technology is used in Qualcomm's (QCOM.O) and Samsung's (005930.KS) chip platforms for Android phones.

Cambridge-based ARM's head of secure services Ben Cade will lead the company, which will employ 80-100 people in development centers in France, Munich and Helsinki as well as Britain, where it will be based.

Cade said the groups' combined technology would be deployed in enterprise security, for example enabling a single sign-on across multiple devices, and in mobile payments.

"We have been working with some public companies, for example Mastercard (MA.N), and more recently in the enterprise security domain to move services into this," he said.

"I would expect those services to start rolling out from around the third quarter of this year."

SECURE MOBILE PAYMENTS

Competition in mobile payments and other secure services is hotting up as more and more people use smartphones and tablets like Apple's iPad to access the Internet.

Companies including Ebay (EBAY.O), with its PayPal unit, and Google, with its Google Wallet, are fighting to win a bigger share of the market.

Gemalto's chief executive Olivier Piou said the new platform could improve the security of such services.

Google's Wallet, for example, was recently shown to be susceptible to a security flaw.

"The Google Wallet issues, those that are at least public, are related to how information was captured in the user interface, and a trusted execution environment will provide a solution to this," he said.

Industry analyst Pete Cunningham at Canalys said the risks to mobile devices were becoming a greater target for criminals, although they were still very small in relation to the PC world.

"In the long term this initiative is good news for consumers but most will be unaware of its existence," he said.

ARM will own 40 percent of the company, while the other companies will own 30 percent each.

They did not disclose how much they were investing in the joint venture, but ARM said it was not a significant amount in terms of its balance sheet.

(Additional reporting by Tarmo Virki; Editing by Mike Nesbit)

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