Through an aggressive strategy of acquisitions, Nuance (NASDAQ: NUAN ) has
built a strong platform of voice-technology systems. And investors have taken
note. So far this year, NUAN shares are up nearly 12%. So what's next? Nuance
has struck yet another interesting deal: the $102.5 million purchase of Swype.
Swype developed technology that allows you to slide your finger or stylus across
a touchscreens keyboard interface to input text. If you haven't used it
before, the process seems a bit strange and even awkward. But it actually can
mean typing at more than 40 words per minute not bad for a touchscreen. Swype
requires incredibly complex algorithms and is based on years of academic
research. Its creator is Cliff Kushler, who started Swype in 2002. Kushler is a
pioneer in mobile input technology, having created the T9 system for mobile
phones that allows for predictive text input. More than 2 billion cell phones
use this technology. Now Swype is getting lots of traction in the marketplace.
By the end of the year, Swype is expected to be installed on more than 100
million devices. A big driver has been Google 's (NASDAQ: GOOG ) Android
smartphones and tablets. However, the biggest boost is likely to come from Apple
(NASDAQ: AAPL ), which is moving to alternative input approaches. To this end,
the iPhone 4s uses Siri, which allows for voice-activated commands. And there is
buzz that this technology uses software from Nuance, which has an extensive
patent portfolio in the category. Voice activation or not, the keyboard should
remain a critical part of the mobile experience (try using voice-activation in a
noisy room!). Thus, mobile devices should be enhanced with innovations like
Swype. Meaning Nuance now is in a greater position to benefit from the latest
trends in the mobile world. Tom Taulli is the author of "All About Short
Selling" and "All About Commodities." You can also find him at Twitter
account @ttaulli. He does not own a position in any of the stocks named here.
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