Microsoft Acquires Perceptive Pixel

At the Microsoft Worldwide Partner Conference (WPC) in Toronto on July 9th, Microsoft Corporation’s CEO Steve Ballmer announced in his keynote speech the company would purchase privately held Perceptive Pixel Inc. (PPI). Perceptive Pixel makes multi-touch displays for collaborative applications, including its flagship product an 82-inch unit. The company also sells 27- and 55-inch multi-touch displays. The complete transcript of the Keynote Speech can be found here.

“We are incredibly excited to be working together on our mutual passion to build technologies that enable people to collaborate and communicate,” Perceptive Pixel founder Jeff Han said. “By joining Microsoft, we will be able to take advantage of the tremendous momentum of the Microsoft Office Division, tightly interoperate with its products, and deliver this technology to a very broad set of customers.”

The 82-inch unit, which currently sells for about $80,000, is said to be the largest projected capacitive display on the market and was introduced at SIGGRAPH 2011 (See Sept. 2011 issue of Large Display Report). An improved version using Corning Gorilla Glass for the sensor was demonstrated at CES 2012 (Feb. 2012 Large Display Report). The unit is true multi-touch with an unlimited number of touches and the ability to deal with mixed finger and stylus touches.

Why is Microsoft interested in a display company? The short answer is Windows 8 – the new Microsoft operating system which has multi-touch capabilities built into the software. Windows 8 will (i.e., is scheduled to) go to the computer manufacturers in August and is expected to be released to the public at the end of October.

Perceptive Pixel was founded in 2006 by Jeff Han and shipped its first multi-touch workstation and large wall solutions in early 2007. Large displays from Perceptive Pixel first came to the public’s attention in 2008 when CNN used an 85-inch unit in its election coverage.  According to the New York Times, “The screen looked a little like an iPad as reimagined by Lex Luthor, Superman’s archenemy.”  This is the sort of application Microsoft wants to encourage among its media, business and military customers. And, of course, if they want to do this easily, they will need to upgrade to Windows 8, where these multi-touch capabilities are built in to the operating system, rather than custom add-ons such as CNN used.

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This is not a consumer-oriented acquisition, it is strictly B2B as emphasized by the fact that Perceptive Pixel will become part of Microsoft’s Office Division.

“The acquisition of PPI allows us to draw on our complementary strengths, and we’re excited to accelerate this market evolution,” said Kurt DelBene, president, Office Division for Microsoft. “PPI’s large touch displays, when combined with hardware from our OEMs, will become powerful Windows 8-based PCs and open new possibilities for productivity and collaboration.”

Perceptive Pixel’s partial customer list is a Who’s Who list of defense, national laboratories, broadcasters and oil companies, among others. At $80K per display, it isn’t surprising that the list is mostly well heeled, high-end users. Presumably, Microsoft is targeting an expansion of the market to many additional government agencies and businesses. Higher volumes will drive prices down, which will drive still higher volumes. Good for Microsoft, Windows 8 and Perceptive Pixel.

While terms of the acquisition were not disclosed, Jeff Han will remain in charge of Microsoft’s Perceptive Pixel operation. So this deal was probably pretty good for Han, as well.