Well, it started small, as these things usually do.

A Bloomberg reporter asked Will Stofega, senior analyst with U.S.-based research firm IDC, which companies he thought were active in the markets Apple seemed to be interested in. Payments came up and the patent applications Apple had filed involving use of its iPhone with Near Field Communication.

Stofega mentioned some companies working in the NFC and related contactless industries and sent information on these and others–25 or 30 companies in all–to the Bloomberg reporter, Connie Guglielmo, who was writing about Apple’s apparently growing appetite for acquisitions.

For some reason, she picked out only one of the companies Stofega sent, Vivotech, a maker of contactless readers and over-the-air platforms for NFC applications and coupons. She called Vivotech a “would-be acquisition target” for Apple in the one paragraph she devoted to the topic in her May 3 story.

Over the next couple of days, you could hardly hear the buzz for the chatter. Bloggers and social networkers ran with the story, some suggesting that Apple boss Steve Jobs could use Vivotech as part of his grand vision to take over the retail payments market with iTunes.

It wasn’t long before the rumor was being repackaged as news by Web sites and the story’s legs were carrying it through industry C-suites, where executives were asking themselves what changes Apple might force them to make if it used a piece of its $23 billion cash hoard to scoop up its small Silicon Valley neighbor Vivotech.

'Nothing Sinister or Interesting'
Stofega, who manages IDC’s mobile device technology and trends research program, told me he wasn’t even suggesting Vivotech was a takeover target to the Bloomberg reporter. It was just one of many companies he'd identified that were involved in contactless and NFC–the same technologies in which Apple has expressed an interest in several patent applications that have come to light recently.

“That’s it; there’s nothing more sinister or interesting than that,” he told NFC Times. “There’s nothing I’ve heard or anyone else has heard that there is anything there. That’s one of the companies that came to mind very quickly.”

Vivotech, which promotes itself assiduously, has been uncharacteristically quiet as the story buzzes around the industry. Vivotech’s normally expansive president and co-founder, Mohammad Khan, has issued a number of no comments to the rumor on the advice of the company’s attorney. “Vivotech is not playing into that story at all,” he told me.

False Rumor Aside, Would a Deal Make Sense?
One might have asked to begin with what Vivotech has that Apple might want.

Vivotech is the largest supplier of contactless readers at the point of sale, with about 600,000 units shipped, mostly in the United States. But that is still a small percentage of total card-accepting terminals in retail outlets. And it’s not as if Vivotech could download a new contactless iTunes payment app to all of the terminals in the field on orders from Apple.

Vivotech also has over-the-air platforms and servers to deliver and manage coupons and loyalty rewards programs. Its trusted service manager platform, or TSM, can handle payment applications, as well, as it has done for a number of trials, including the large NFC pilot launched by Citigroup last year in Bangalore, India. But Vivotech investor First Data apparently passed on the company’s OTA platform in favor of one from IBM for the recent launch of First Data’s TSM service in the U.S.

Apple could perhaps use Vivotech’s general know-how in NFC and contactless, and more specifically it might want to adopt parts of the vendor's OTA platform and back-office system. That’s if Apple acts on the patent requests and puts the iPhone at the center of the retail-payment experience.

One of the patent applications describes Apple setting up a “data manager,” a database that Apple would apparently control, which would enable retailers and product manufacturers to send offers and information over the Internet to iPhone users right at the point of sale.

But would Apple need Vivotech for this? Apple presumably believes it already has a lot of the technology it would require, otherwise it wouldn’t be filing the patent claims, Stofega told me.

And, of course, we don’t know yet whether Apple will actually introduce NFC in its next iPhone generation, due out in a couple of months. It does seem likely from the sheer volume of Apple’s patent requests involving NFC that future versions of its popular smartphone will support the technology.

I can’t help but think that what’s fueling the Vivotech acquisition rumors are fears that Apple­–having already shaken up the mobile and music industries–now wants to combine the iPhone and iTunes to take a big chunk of the retail payments industry.

That is the fear among some in the payments industry. But it’s simply not borne out by Apple’s patent applications involving use of the iPhone to make contactless payments at the point of sale or enabling friends and acquaintances to exchange money by tapping their phones together, that is, using NFC's peer-to-peer mode. Patents on both these topics give credit card and bank accounts loaded on the iPhone a prominent role, though Apple suggests it could charge fees from banks for making their card accounts the preferred payment means in iPhone digital wallets at the point of sale. Moreover, let’s not forget that most iTunes accounts are funded by credit cards.

Apple does mention iTunes as a payment means, along with credit and bank accounts, in a patent request involving P2P payments.

A More-Menacing Apple
Of course, Apple looks a lot more menacing these days as its market clout grows, and it hones its take-no-prisoners approach to protecting its technology. Many believe the raid a couple of weeks ago by police on the home of Jason Chen, editor of tech site Gizmodo, was done at the urging of Apple. The site had revealed details of Apple’s fourth-generation iPhone prototype, which Gizmodo had purchased from someone who had found it after a careless Apple engineer had left the phone on a bar stool. Police broke down Chen's door and confiscated four computers and two servers.

But don’t expect Apple to gobble up Vivotech as part of a planned domination of retail payments. There is nothing to the rumor.

So it seems Vivotech is free to pursue a lucrative IPO at some future date–provided, of course, the market for contactless POS readers picks up and NFC finally takes off.