As data privacy and security have become germane issues in consumers’ minds in recent times, Apple looks to beef up security on iPhones.

US-based Apple may be planning to acquire 1Password, a popular password manager developed by AgileBits. This development is coming at a time when managing passwords is one of the most daunting tasks for iPhone users, which brings this pertinent question to mind: Is the default iCloud Keychain app on iPhones not sophisticated enough?

Years ago, Apple made efforts to make privacy one of its unique offerings, anticipating that this strategy would set it apart from the way its advertising-oriented rivals approached privacy, in a bid to boost iPhone sales. While it remains unclear if that decision yielded the desired result, it has undoubtedly differentiated Apple philosophically from other tech giants — the likes of Microsoft, Dell, etc.

On average, Apple buys 15 to 20 companies in one year, CEO Tim Cook says. Only a couple of these deals are heard about in public because a sizable percentage of the acquisitions are neither consumer-oriented nor disclosed.

Is This a Test Drive?

In the coming months, Apple is planning to deploy 1Password internally to every member of its staff, totalling 123,000, with corporate and retail personnel also included. As the Cupertino-headquartered tech company is reportedly in talks to scoop up AgileBits, which is a small private company, the latter has denied this deal in a tweet it made yesterday.

This deployment of 1Password by Apple could essentially be a test drive.

1Password still Leads iCloud Keychain in the Market

This development is intriguing in a number of ways. First, it shows Apple is aware of the fact that iCloud Keychain isn’t as competitive as 1Password. The former cloud-based password management app was released about 5 years ago, and its unveiling posed a threat to developers of password manager software because Apple’s iCould Keychain features deep integration across all its devices.

In spite of this seemingly powerful edge, AgileBits could still defend its leadership status in the market, along with rivals such as LastPass, bought in 2015 by LogMeIn for $110 million. This leading position could be partly attributed to AgileBits’ broad set of third-party integrations with other apps as well as services. As a fairly small company, it is not known for certain how many users that 1Password has, other than the vague “millions” customer base.

Apple Is Keen on Subscription Services in Recent Times

Another issue that makes a potential acquisition of the password manager interesting is that in 2016, AgileBits started pivoting to a subscription package. Previously, 1Password was offered for sale as a one-time license (and price). From the user perspective, the individual plan goes for $3 a month while the family plan costs $5 a month. The company also offers enterprise plans to business customers that are more than 30,000 as claimed by AgileBits.

You may be aware of Apple’s drive to grow its services business, mainly by using different types of subscriptions that are provided for its huge user base. Buying AgileBits and offering a password management service that is both subscription-based and cloud-based, could be a perfect fit for this model.

Owing to the fact that 1Password has been employed for several years by private individuals and businesses from every background and industry; it does not come as a surprise that Apple adjudges it as a piece of reliable software from a security perspective. However, a key question is that why is Apple planning to pay millions of dollars annually for this deal in lieu of buying the app outright?

Alternatively, the tech giant may acquire AgileBits just to undergird the performance of the free iCloud Keychain. Or it could provide both a free and paid version, with a paid subscription offering more features. Certainly, there are many strategic options in view in this deal, and at the right price, Apple should close the deal.