Apple's New iPhone Puts Nuance (NUAN) Voice Recognition Technology in Spotlight
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Rating Summary:
45 Buy, 28 Hold, 9 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 6 | New: 26
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Apple (Nasdaq: AAPL) is taking mobile voice recognition mainstream with its latest iPhone.
The iPhone 4S new Siri voice feature allows users to get things done just by asking. Want to send a message, set a reminder, set up a meeting, or place a call - just ask and it’s done. The feature not only understands what you're saying, it's smart enough to know what you mean.
While the front end is branded Siri, a company Apple acquired in 2010, the back end may be where the story is.
Siri is powered by technology from Nuance Communications (Nasdaq: NUAN), the leader in voice recognition technology. The two have a long-term licensing deal in place.
Nuance's technology can also be seen in Ford's (NYSE: F) SYNC platform, in addition to numerous speech recognition solutions for the healthcare industry and corporate customer service market.
While voice recognition is nothing new, the technology is getting better and better. Now Apple just gave it the stamp of approval for the smart phone market...cue the Apple copycats.
Nuance's Chief Technology Officer Vlad Sejnoha said mobile voice recognition is still in the nascent stages and he predicts that over the next couple of years "all leading smartphones will have integrated rich voice recognition technology."
The implications for voice recognition in the mobile space could be quite large. Analysts from IDC predict that by 2015 worldwide smarthphone shipments could approach one billion. That’s more than double the expected 472 million smartphone shipments this year and the roughly 305 million units shipped in 2010.
Nuance is not without competition however, and one analyst worries that Google (Nasdaq: GOOG) could push its own software when it completes its acquisition of Motorola (NYSE: MMI), a key Nuance customer. Wedbush's Scott Sutherland said, "over time, we expect Google to push its own speech software in Motorola devices," He notes that in the second-quarter, Motorola shipped 10.6 million phones of which, 6.2 million were smartphones. Research In Motion (Nasdaq: RIMM), Samsung, and Nokia (NYSE: NOK) are also worth watching ne notes.
Sutherland is also not enthusiastic about Nuance's iPhone 4S involvement. "While we believe Nuance’s underlying speech recognizer is still supporting these applications, this appears to diminish Nuance's overall opportunity in offering embedded and network speech-enabling technology and applications as Siri is offering competitive applications," he said.
Sejnoha however is not worried, noting that smartphone makers are aggressively competing with each other to create a better user experience to win over customers. "We work very deeply with our customers, helping them build that unique user experience," he said. "Our competitors don't work like that."
Beyond smartphones, tablet computers like Apple's iPad would appear to be the next opportunity for voice recognition technology. Of course Sejnoha could not comment on Apple's future plans for the technology.
Shares of Nuance Communications are down 1.3 percent today, but have risen 20 percent over the past month on speculation surrounding Apple's new iPhone launch.
The iPhone 4S new Siri voice feature allows users to get things done just by asking. Want to send a message, set a reminder, set up a meeting, or place a call - just ask and it’s done. The feature not only understands what you're saying, it's smart enough to know what you mean.
While the front end is branded Siri, a company Apple acquired in 2010, the back end may be where the story is.
Siri is powered by technology from Nuance Communications (Nasdaq: NUAN), the leader in voice recognition technology. The two have a long-term licensing deal in place.
Nuance's technology can also be seen in Ford's (NYSE: F) SYNC platform, in addition to numerous speech recognition solutions for the healthcare industry and corporate customer service market.
While voice recognition is nothing new, the technology is getting better and better. Now Apple just gave it the stamp of approval for the smart phone market...cue the Apple copycats.
Nuance's Chief Technology Officer Vlad Sejnoha said mobile voice recognition is still in the nascent stages and he predicts that over the next couple of years "all leading smartphones will have integrated rich voice recognition technology."
The implications for voice recognition in the mobile space could be quite large. Analysts from IDC predict that by 2015 worldwide smarthphone shipments could approach one billion. That’s more than double the expected 472 million smartphone shipments this year and the roughly 305 million units shipped in 2010.
Nuance is not without competition however, and one analyst worries that Google (Nasdaq: GOOG) could push its own software when it completes its acquisition of Motorola (NYSE: MMI), a key Nuance customer. Wedbush's Scott Sutherland said, "over time, we expect Google to push its own speech software in Motorola devices," He notes that in the second-quarter, Motorola shipped 10.6 million phones of which, 6.2 million were smartphones. Research In Motion (Nasdaq: RIMM), Samsung, and Nokia (NYSE: NOK) are also worth watching ne notes.
Sutherland is also not enthusiastic about Nuance's iPhone 4S involvement. "While we believe Nuance’s underlying speech recognizer is still supporting these applications, this appears to diminish Nuance's overall opportunity in offering embedded and network speech-enabling technology and applications as Siri is offering competitive applications," he said.
Sejnoha however is not worried, noting that smartphone makers are aggressively competing with each other to create a better user experience to win over customers. "We work very deeply with our customers, helping them build that unique user experience," he said. "Our competitors don't work like that."
Beyond smartphones, tablet computers like Apple's iPad would appear to be the next opportunity for voice recognition technology. Of course Sejnoha could not comment on Apple's future plans for the technology.
Shares of Nuance Communications are down 1.3 percent today, but have risen 20 percent over the past month on speculation surrounding Apple's new iPhone launch.
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