Nuance Competing in a Fragmented Mobile Market

Implications: Different from healthcare dictation and call center IVRs, Nuance faces the challenge of the fragmented mobile market of device manufacturers, mobile carriers and application developers.

Analysis:

Nuance seeks to dominate speech recognition in the mobile space similar to its history as ScanSoft and a Xerox start-up that controlled imaging software and healthcare dictation.  The article raises the question of Nuance being a “monopolist” by stifling competition and limiting progress.  Nuance has expanded through acquisitions that had specific applications.  The entry in speech recognition was the acquisition of SpeechWorks that had Amtrak reservations and E-Trade transactions.  The buyout of Viecore focused on the CTI and IVR applications of call center platforms for CRM efficiencies.  And the recently acquired eScription concentrates on medical transcription and voice-driven records software.  These applications can be cost justified by businesses for streamlining resources and improving service. 

The mobile space is different in the array of end-users, providers, and applications.  The end users are a wide range of consumers, business persons, and “prosumers”.  And the providers are fragmented across device manufacturers, mobile carriers, and application developers.  Despite the Vlingo patent lawsuit, Nuance is unlikely to control speech recognition across the mobile competitive landscape.  There are too many platforms such as Nokia’s Ovi, Sony Ericsson’s Play Station, Samsung’s Omnia, and Qualcomm’s Plaza.  The carriers promote their on-deck services like Verizon’s V CAST services.  Microsoft has its TellMe acquisition for speech recognition that is available on RIM’s Blackberry models.  Vlingo won the deal for Yahoo! One Search competing against Nuance.  Vlingo has just been announced as a free download on Blackberry smartphones. 

Nuance’s challenge is whether speech recognition can be monetized or is dependent on license patent royalties.  Nuance is the provider for free directory assistance (DA) of Jingle and SayHello.  Both DAs are ad-based, and Jingle Networks claims to have 5% of the yearly 411 calls with users willing to listen to ads for the call savings.  And Nuance’s Dragon Naturally Speaking is embedded in Garmin’s Nuvi device for the Personal Travel Assistant.  But speech recognition for mobile DA and navigation might diminish as the mobile Web emerges with text input solutions for local search.  Nuance seems to want to foster innovation with its recent showing of the open voice search (OVS) on an Apple iPhone that links to any search engine.  Nuance appears to strive to be a full competitor in voice, text and video.

Nuance’s future might be what it calls “mobile discovery solutions” that assist or eliminate typing to access the Web.  Nuance is introducing the T9 Nav derived from the Tegic acquisition.  The T9 Nav will launch in India as a search tool that reduces key presses and adapts intelligently for the user.  Besides the fragmentation across devices, carriers and applications, Nuance is confronted with disparity of marketplaces.  Instead of trying to monopolize speech recognition with patent litigation in mature saturated markets, Nuance might compete for the technology advancement in emerging markets with applications that can be monetized.