Nuance To Buy Provider Of Speech-Enabled Mobile ServicesNuance To Buy Provider Of Speech-Enabled Mobile Services

Nuance Communications agreed to buy MobileVoiceControl, a provider of speech-enabled mobile search and messaging services, in a deal designed to accelerate Nuance's entry into a potentially lucrative market that is attracting the attention of wireless carriers.

The acquisition, for an undisclosed sum, reflects growing interest by mobile service providers in an emerging market that could reap billions of dollars over the next few years. Nuance, which expects to close the deal by the end of the year, plans to move MobileVoiceControl's technology over to its speech-recognition platform to enhance performance and prepare for additional services, Matt Revis, director of product marketing for Nuance, said when the deal was announced Thursday. Revis declined to disclose details or a product roadmap.

MobileVoiceControl is now available mostly on advanced smartphones offered by Sprint Nextel, a major distributor of the company's software. Two other phones offered by other carriers also support the service, the Motorola Q and the Palm Treo 700wx.

MobileVoiceControl's application must first be downloaded to a PC and then transferred to the smartphone through the software that enables the phone to synchronize with address books, calendars and other PC applications. Once the software is installed, users press a side button on the phone to contact MobileVoiceControl's data center, which processes the services.

For example, to send an e-mail, the mobile phone dictates the message, which MobileVoiceControl sends back as a text message for review. The user then sends the e-mail from the phone. Other voice-enabled services include dialing a person in the phone's address book, creating a calendar entry, and searching the Web. Users also can ask for directory information, weather, stock quotes and sports scores. The service costs $6 a month, plus the cost of the carrier's data plan, which is separate. Nuance, based in Burlington, Mass., has been in the mobile market for voice-enabled services for a while, along with IBM, WireVision and others, Dan Miller, analyst for Opus Research, said. Nuance's plans to acquire MobileVoiceControl, however, reflects the expectation of a growing market for speech-enabled mobile search and messaging services. Opus expects the market to grow rapidly from an "infinitesimal" revenue stream today to $300 million in a couple of years and a multi-billion-dollar market by 2010.

"This is the beginning of some serious recognition that speech-enabling transactions open the door for some ear-popping revenue streams," Miller said.

The big money would arrive when service providers link speech-enabled search to advertising, similar to the business model used by search engines like Google in the PC world. Someone searching for a product, for example, could get sponsored ads from local retailers.

The potential has not been lost on carriers, which are warming up to speech-enabled services after an initial experience that failed to generate much revenue, Miller said. Beginning technology performed poorly, and failed to attract wireless subscribers.

Today's speech-recognition technology, however, is much better and is being used by Sprint Nextel and Verizon Wireless to sell products, such as ring tones and games, and to access other data services, Miller said. Other carriers are expected to follow.

"There's a revenue spike when people start using these services," Miller said. "Carriers are finding ways to bump up revenues from subscribers, without raising data rate plans. The light bulb is coming on."