Samsung in Talks to Acquire Apple Partner Nuance Communications

Iphone siri 800

Nuance Communications Inc., the speech-recognition firm responsible for the technology powering Siri, is in talks with multiple parties — including Apple’s fiercest rival, Samsung — about a potential sale, according to sources speaking with the Wall Street Journal.

Speech-recognition software maker Nuance Communications Inc. has held discussions with potential suitors regarding a sale of the company, according to people familiar with the matter.

The Burlington, Mass., company has recently spoken about a possible sale of the company with Samsung Electronics Co. and private-equity firms, some of the people said. It isn’t clear where sale talks, some of which happened earlier this year, currently stand or if they will lead to a deal.

Nuance is known for the voice-recognition services it provides for different partners, such as Samsung’s handsets, televisions, and tablets, and for the dictation software Dragon Naturally Speaking.

The speech-recognition firm confirmed its partnership with Apple in 2013. Since then, Nuance has been luring investors with the promise of being the chosen provider of voice-recognition services for a wide variety of applications.

Nuance was in “trouble” last year as it changed the terms under which it gets paid for the provided services. Prior to that change, Nuance collected payments up-front for the devices that included its services. Since last fall, it transitioned to an on-demand payment structure that’s based on actual usage of the services. This caused a near-term pressure on revenue and profits.

In August of last year, rumours of Apple moving Siri development in-house surfaced, claiming that Apple may buy Nuance and its voice-recognition expertise outright. But since Apple is working on its own voice-recognition alternative, there was no reason to buy Nuance.

With iOS 8, Apple is further enhancing Siri’s capabilities, such as Shazam integration, “Hey Siri” hands-free activation, and likely the ability to search for apps in the App Store.

Image credit: ReadWriteWeb

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