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Mobile World Congress Day 1

March 3, 2015

It feels like I had a whole week’s worth of the trade show wrapped into one day! By the time mid week hits, I’ll surely be ready to head home! Here are some of the highlights from the first day of Mobile World Congress 2015:

  • First a word about Catalonia. That’s where Barcelona is…in the heart of Catalonia, a province of Spain. Don’t expect delayed meetings, inefficiencies, relaxed long lunches or anything like that. The Catalonians have the precision of Germans (to continue my gross stereotyping!), and my experience with one of the largest trade shows on the planet is that it’s going off without a hitch! I picked up my badge at the airport in a five-minute line that was well staffed and moved rapidly. I could just about walk into the show yesterday morning. The subways and trains though crowded and overheated ran extremely smoothly. Kudos to the show management for pulling off such a difficult feat!
  • I’d be remiss without mentioning the Galaxy S6. Samsung invited us to the launch and of course they continue to use Sensory in a relationship that has grown quite strong over the years.  Samsung continues to innovate with the Edge, and other products that everyone is talking about. It’s amazing how far Apple took the mantle in the first iPhone and how companies like Samsung and the Android system seem to now be leading the charge on innovation!
  • My favorite product that doesn’t feature Sensory technology that I bumped into was an electronic jump rope. They put sensors in the handles and a visual display shows across the field of the rope, kind of like those clocks that rapidly flash LED’s as the pendulum quickly moves back and forth in order to display the time. I talked with Alex Woo from Tangram and he said they were going to launch a crowdfunding campaign. I gave Alex a demo of our TrulyHandsfree with jump ropers jumping and all the show noise and of course it worked flawlessly. It would be really cool to be able to ask things like “How much time,” “How many jumps,” “What’s my heart rate,” or “How many calories burned” and so on, and the display would make voice control so much more functional!
  • We had a couple of partnership announcements here at the show, supporting both Qualcomm and Synopsys – both great partners to add to our support mix, and always nice when its customers driving our platform directions. The Qualcomm platform is interesting because it’s not their standard platform for 3rd parties to support. As far as I know they opened it up to Sensory and ONLY Sensory, and already we are seeing much interest!
  • Last night ZTE had a press party to indoctrinate Sensory and NXP into its Smart Voice Alliance. ZTE is really putting some forward thinking into the user experience and their research shows how much people want a voice interface but how dissatisfying the current state of the art actually is. Sensory’s hoping to change that! We’ll make one of our biggest announcements in history over the next month… and I’ll let you in on the secret (it’s on our website already!) We call it TrulyNatural, and it will be the highest accuracy large vocabulary embedded speech engine that the world has ever seen!

Hasta Luego!!!

Deep Listening in the Cloud

February 11, 2015

The advent of “always on” speech processing has raised concerns about organizations spying on us from the cloud.

4081596290_5ccb708d7d_mIn this Money/CNN article, Samsung is quoted as saying, “Samsung does not retain voice data or sell it to third parties.” But, does this also mean that your voice data isn’t being saved at all? Not necessarily. In a separate article, the speech recognition system in Samsung’s TVs is shown to be an always-learning cloud-based system solution from Nuance. I would guess that there is voice data being saved, and that Nuance is doing it.

This doesn’t mean Nuance is doing anything evil; this is just the way that machine learning works. There has been this big movement towards “deep” learning, and what “deep” really means is more sophisticated learning algorithms that require more data to work. In the case of speech recognition, the data needed is speech data, or speech features data that can be used to train and adapt the deep nets.

But just because there is a necessary use for capturing voice data and invading privacy, doesn’t mean that companies should do it. This isn’t just a cloud-based voice recognition software issue; it’s an issue with everyone doing cloud based deep learning. We all know that Google’s goal in life is to collect data on everything so Google can better assist you in spending money on the right things. We in fact sign away our privacy to get these free services!

I admit guilt too. When Sensory first achieved usable results for always-on voice triggers, the basis of our TrulyHandsfree technology, I applied for a patent on a “background recognition system” that listens to what you are talking about in private and puts together different things spoken at different times to figure out what you want…. without you directly asking for it.

Can speech recognition be done without having to send all this private data to the cloud? Sure it can! There’s two parts in today’s recognition systems: 1) The wake up phrase; 2) The cloud based deep net recognizer – AND NOW THEY CAN BOTH BE DONE ON DEVICE!

Sensory pioneered the low-power wake up phrase on device (item 1), now we have a big team working on making an EMBEDDED deep learning speech recognition system so that no personal data needs to be sent to the cloud. We call this approach TrulyNatural, and it’s going to hit the market very soon! We have benchmarked TrulyNatural against state-of-the-art cloud-based deep learning systems and have matched and in some cases bested the performance!

Random Blogger Thoughts

June 30, 2014

  • TrulySecure™ is now announced!!!! This is the first on device fusion of voice and vision for authentication, and it really works AMAZINGLY well. I’m so proud of our new computer vision team and in Sensory’s expansion from speech recognition to speech and vision technologies. Now we are much more than “The Leader in Speech Technologies for Consumer Electronics”- we are “The Leader in Speech and Vision Technology for Consumer Products!” Hey check out the new TrulySecure video on our home page, and our new TrulySecure Product Brief. We hope and expect that TrulySecure will have the same HUGE impact on the market as Sensory had with TrulyHandsfree, the technology that pioneered always on touch less control!
  • Google I/O. Android wants to be everywhere: in our cars, in our homes, and in our phones. They are willing to spend billions of dollars to do it. Why? To observe our behaviors, which in turn will help provide us more of what we want…and they will also assist in those purchases. Of course this is what Microsoft and Apple and others want as well, but right now Google has the best cloud based voice experience, and if you ask me it’s the best user experience that will win the game. Seems like they should try and move ahead on the client, but lucky for Sensory we are staying ahead!
  • Rumors about Samsung acquiring Nuance…Why would they spend $7B for Nuance when they can pick up a more unique solution from Sensory for only $1B? Yeah, that’s a joke, and is definitely not intended as an offer or solicitation to sell Sensory!
  • OH! Sensory has a new logo! We made it to celebrate our 20 year anniversary!

The price of free phone features

August 5, 2013

I often get the question, “If Android and Qualcomm offer voice activation for free, why would anyone license from Sensory?” While I’m not sure about Android and Qualcomm’s business models, I do know that decisions are based on accuracy, total added cost (royalties plus hardware requirements to run), power consumption, support, and other variables. Sensory seems to be consistently winning the shootouts it enters for embedded voice control. Some approaches that appear lower cost require a lot more memory or MIPS, driving up total cost and power consumption.

It’s interesting to note that companies like Nuance have a similar challenge on the server side where Google and Microsoft “give it away”. Because Google’s engine is so good it creates a high hurdle for Nuance. I’d guess Google’s rapid progress helps Nuance with their licensing of Apple, but may have made it more challenging to license Samsung. Samsung actually licensed Vlingo AND Nuance AND Sensory, then Nuance bought Vlingo.

Why doesn’t Samsung use Google recognition if it’s free? On the server it’s not power consumption effecting decisions, but cost, quality, and in this case CONTROL. On the cost side it could be that Samsung MAKES more money by using Nuance in some sort of ad revenue kickbacks, which I’d guess Google doesn’t allow. This is of course just hypothesizing. I don’t really know, and if I did know I couldn’t say. The control issue is big too as companies like Sensory and Nuance will sell to everyone and in that sense offer platform independence and more control. Working with a Microsoft or Google engine forces an investment in a specific platform implementation, and therefore less flexibility to have a uniform cross platform solution.

Thank you SIRI!

January 27, 2012

Lot’s of thoughts…no time to share them…So I’ll be brief in a few different areas:

  1. Thank you SIRI! Now every CE Company must have speech technology. How the world has changed, and after 18 years of Sensory being one of the only speech company focused on consumer electronics, now everyone is doing it!
  2. What’s really weird is the number of chip companies and investment bankers that have been popping up on our doorsteps since SIRI shipped. Companies do move in herds!
  3. Nuance buys Vlingo. Full disclosure…Vlingo is Sensory’s partner (we’ll see what happens after the deal closes.) How much was paid? (Rumor I keep hearing is the highway that runs near my house…) Why did they pay so much? (because they can, to end the personal lawsuit, to end the other lawsuits, to prevent market share from eroding, NOT to grow their technology base!)
  4. Speaking of Vlingo, I really like that their newsletter and videos that imply they are better than SIRI because they have “more hands-free functionality”…that’s TrulyHandsfree by Sensory!
  5. And what about the Justice Department’s investigation of Nuance (Don’t they have better things to do with our taxes these days?)…The Nuance/Vlingo’s position seems to be all about fighting Microsoft, Google, etc…which has some merit, but if it don’t have Android or Windows Phone, who ya gonna call? Nuance will always be on the list.
  6. Sensory news…
    • Yeah! Our TrulyHandsfree is in Samsung’s Galaxy Note, introduced at CES!
    • Monster Cable showed a cool product at CES with TrulyHandsfree™ inside…they were kind enough to invite the Sensory crew to see Chicago. GREAT CONCERT! I think there were another 20-30 or so products on the CES floor with Sensory inside!
    • We also just got nominated for a Global Mobile Award at the Mobile World Congress.
    • And who says there’s a recession still going on? Our chip-based product sales are going through the roof! The success of our IC product line is also based on TrulyHandsfree because it enables a quasi-natural language interface.
    • Where in the world is Majel???? Sensory did a voice-controlled light switch a few years back with a company called VOS Systems. They licensed the Star Trek brand, used “Computer” as the voice trigger to control the lights, and even licensed Majel Roddenberry’s voice…pretty cool!

Todd
sensoryblog@sensoryinc.com

The Value of Speech Patents (part 2)

August 17, 2011

I’ll continue on with a few thoughts from yesterday’s blog because I got asked the question: “Why would speech patents be worth so much more than general telecom and other patents?”

There are 2 key reasons:

  1. Speech is HUGE in mobile.
    1. Look at Google/Android. I read in the Mercury News this week that Google believes 80% of its revenues will come from mobile phone search in the future. Let’s combine that with the old stat that 25% of Android search is voice search (this was a year or so ago, and it’s probably been growing). This would mean a minimum of 15% of Google’s overall revenues will come from mobile phone voice search…and this number will probably grow!
    2. Apple. I guess its common knowledge that their new iOS5 will include “Assistant” that allows a complete voice controlled user experience. This is big. This is the company that defines user experiences, moving from a follower in speech technology to a leader (even if it is Nuance tech!).
  2. Available speech patents are DECREASING. Remember when the Bass brothers started buying up silver to drive up the price? Scarcity increases price. Nuance has been “buying” speech patents at a faster rate than they are issued! Combine this with patent acquisitions by companies like Vlingo, (who spent in the 7 figures to buy up a large number of Intellectual Ventures speech patents in order to countersue Nuance,) and the available portfolio of speech patents is quite small. Finding patents with early priority dates are even scarcer.

As an interesting case in point, Sensory has a few key patents on client/server speech recognition approaches. We have a very early initial filing date from 1996 (if you want to know the patent number, drop me an email.) We went through 10 years of revisions and responses to the patent office and finally got 3 patents issued on our initial concepts of using client devices connected to more powerful servers with speech recognition (yeah that should sound familiar today, but it was a very unique idea in 1996!). These are VERY fundamental patents with a VERY early priority date. Back in the downturn of 2008 we talked to a patent auction house that gave a very thorough evaluation of the patents, and they concluded it would be the highest valued auction they had ever seen. They wanted a “reserve” price in the single million dollar digits, but we wanted it in the double million digits, so we never went forward. It just shows the importance of speech patents, and with the recent lawsuits in the mobile and speech community, speech patents have become even more valuable today!

Todd
sensoryblog@sensoryinc.com

Following M&A Monday–It’s About the Patents

August 16, 2011

Two BIG acquisitions happened over the last week. One is big for the smartphone space, and the other is big for the speech industry. I think they both had something to do with technology patents.

Google acquired Motorola. As everyone knows, Google has been wrapped up in a lot of legal feuds over Android. Android is certainly doing well, its competitors want to knock it down, and patent infringement seems to be the preferred means of fighting. Long established companies like Microsoft, RIM and Apple have had a lot of time to build a patent portfolio…on top of that they recently outbid Google on the Nortel patent acquisition. SO… Google has to beef up its patent portfolio quickly to fight back and eventually do what big companies do – agree to cross license and stop paying the law firms! Or maybe Google just wants a boatload of patents so they can be comfortable indemnifying all the Android users.

So at the end of July, Google bought a boatload (well over 1000) of patents from IBM (Nuance bought a bunch of patents from IBM as well focused on speech tech!)

Now Google buys MOTO. Here’s something really interesting. The price paid for Nortel was about $4.5B for 6000 patents (plus patents applied for etc). That’s about $750K/patent. Google underbid and didn’t get in on the deal. Google bought MOTO Mobility for $12.5B for a little over 17,000 patents… Just under $750K/patent! VERY INTERESTING…seems like $750K/patents is the going rate for large patent portfolios!!!!!

Specialized portfolios in speech technology are worth even more!

Nuance acquires Loquendo. I’m sure this wasn’t just for patents…it was taking out one of their only competitors for both SR and TTS, and Nuance got a GREAT price for a company with a lot of excellent technology. I have no idea how many patents Loquendo has…I think 7 in the US and probably a lot more in Europe. Let’s estimate that they had 35 patents total. At $75M, that would be around $2M per patent, which isn’t far off of the per-patent price Nuance paid for SVOX, who had 60-80 patents. The revenue multipliers seem pretty consistent too…SVOX was doing around $25M in sales and was bought for around 6x sales…likewise Loquendo was doing about $12.5M in sales and was bought for ABOUT SIX TIMES SALES. What does Nuance trade at? ABOUT SIX TIMES SALES. So what does that mean? Well you could argue that if Nuance pays less or equal to its revenue multiplier (6xsales) for an acquisition, then the patents essentially come free because the acquired revenues should immediately boost Nuance’s valuation by close to the purchase price.

I wonder if that’s how Nuance thinks about it. Then they wouldn’t be paying $2M for a patent or even $750K…they’d essentially get them for free and in the process build the biggest database of speech patents in the world.

Maybe Nuance’s strategy isn’t really about taking out competitors and buying customers through M&A, but maybe they want to own the majority of patents in the speech tech space. Nuance certainly hasn’t made money in using patents for lawsuits. Dave Grannan, Vlingo’s CEO was recently quoted as saying, ”We are happy to report that with this latest ruling, Nuance’s record remains perfect in patent infringement trials, they haven’t won any.” You go, Dave!

So why would Nuance want so many speech patents if they can’t make money in court? Well I’ve blogged earlier about their use of patent infringement in acquisitions. Maybe they are looking to be bought by a Google, Apple, or Microsoft…that patent portfolio could certainly do a lot in user experience fights. But if cross licensing agreements get worked out between the companies big enough to acquire Nuance, then where does that leave Nuance?

Well…without a lot of competition for sure!

Todd
sensoryblog@sensoryinc.com

There You Go Again!

June 17, 2011

That’s what America’s most charismatic President used to say! I didn’t necessarily agree with Reagan’s politics, but I sure did like his presentation. Nuance’s Paul Ricci is kind of the inverse of that; a lot of people don’t like him, but it’s hard to argue with his politics (although I will later in this blog…)
Nuance does seem to perform remarkably well. They have an amazing patent position, and are quite highly valued by almost any financial metric you can apply, including their market cap (over $6B and near an all-time high), their revenue multiplier (5-6 range), as well as P/E over 2000 (and although fairly meaningless, it does show they are finally profitable using GAAP rather than their modified accounting policies!!!!)

I’ve never met Ricci. I’ve known a lot of people who have worked for him, with him, and against him. Everybody agrees he’s a tough guy, and I think most would also use words like ruthless and smart. A lot of people might even call him an asshole, and whether true or not, I don’t think he cares about that. He’s a competitive strategy gameplay kind of guy, and he’s done pretty well. However, he has a HUGE challenge being up against the likes of Google, Microsoft, and eventually Apple (let alone the smart little guys like Vlingo, Yap, Loquendo, etc.). But I digress…

I started this blog thinking about Nuance’s recent acquisition of SVOX. And I wanted to congratulate Nuance and Ricci for ACQUIRING SVOX WITHOUT SUING THEM. If I look back a ways (and I can look back VERY FAR!), Nuance (or the company formerly known as Lernout and Hauspie and then Scansoft) has at least 4 embedded speech recognition companies wrapped into it over the years. In rough chronological order: Voice Control Systems (VCS was probably the FIRST embedded speech company and the first and only embedded group to go public), Phillips Embedded Speech Division (I think they had acquired VCS for around $50M), Advanced Recognition Technologies, and Voice Signal Technologies. I believe Ricci was at the helm during the Philips embedded acquisition (this was the one closer to 2000 as opposed to the Philips Medical group a few years ago), ART, and VST. Interestingly, 2 of these 3 were lawsuit acquisitions. There are probably some inside stories about SVOX that I don’t know (e.g. threats of lawsuits??), but it appears that Nuance’s acquisitions of embedded companies are now down to 50% lawsuit driven. Thanks, Paul, you’re moving in the right direction! ;-)

OK, so what’s wrong with suing the companies you want to acquire? It probably does lower their price and reduce competitive bidding. Setting aside the legal and moral issues, there is one huge issue that’s clear- If you want to hold onto your star employees and technologists, you need to treat them well. Everyone understands who the “stars” are – they are the 10% of the workforce that contribute to 90% of the innovation. They are not going to stick around unless they are treated right, and starting off a relationship by calling them thieves is not a good way to court a long term relationship.

For example, there’s been a lot of press lately about the Vlingo/Nuance situation and how Ricci offered the top 3 employee/founders $5M each to sell Vlingo (plus a bundle of money for Vlingo!) Well, Mike Phillips used to be Nuance’s CTO (through acquisition of Speechworks)…so wouldn’t it have been more valuable to KEEP Mike there than BUY him back? The “other” Mike…Mike Cohen is Google’s head of speech. He FOUNDED Nuance (well, the company formerly known as Nuance!) and left to join Google, and of course this caused a lawsuit…think either of the Mike’s (two of the smartest speech technologists in the industry) would ever go back to Nuance? Google has managed to hold onto Cohen, so it’s not just an issue of the best people leaving big companies because “little companies innovate.” I’ve also seen the recent rumor mill about Nuance’s Head of Smart Phone Architecture leaving for Apple…
By the way, you gotta treat customers nicely too! Strong arm tactics on customers and competitors might close short term deals, but I think there are better approaches in the long run.

So it’s the personnel and customer thing that Nuance is missing out on in their competitive gameplay strategy, and my hope is that SVOX’s acquisition represents a significant change in how Nuance does business!

As a point in contrast, Sensory has acquired only one company in our history – Fluent Speech Technologies (and no, we didn’t sue them first.) This was a group that spun out of the former Oregon Graduate Institute back in the 1990’s. We saw a demo of theirs back in 1997-1998, and thought the technology was great. They offered to sell us the speech recognition technology (not the company), so they could focus on animation opportunities, but we had NO INTEREST in that. We wanted the people that made the technology, not the technology itself. That’s how our Oregon office was born; we acquired the company with the people. The office is now about as big as our headquarters (and some of our people in Silicon Valley have even moved up there!) By the way, ALL the technologists that came with that acquisition are still with us after 12 years, and we’ve kept a very friendly relationship with the former OGI as well.

Time for a breather…Yeah, I do long blogs….if you see a short one, which might start appearing, it’s probably a “ghostwriter” helping me out…. ;-)

So let’s look at Nuance’s acquisition of SVOX. Why did Nuance acquire them?

  1. SVOX was for sale. I don’t mean this tongue in cheek. I suspect SVOX proactively approached Nuance (and probably Google and others as well) to buy them. If you look at SVOX’s Board (many of whom are their investors), it’s a bunch of guys that ran retail empires and huge organizations, so they probably got tired (in the midst of the economic downturn of the last few years) of waiting.
  2. SVOX was affordable. I don’t mean cheap, and I don’t know yet what Nuance paid, but my guess is Nuance probably paid in the 4-7x sales range. SVOX as a wildass guess was doing in the $20-$30M year range, so Nuance might have paid $80-$210M…quite affordable for Nuance. Since Nuance is traded at around 5-6x sales, that’s not too bad from a revenue multiplier perspective, and I’d guess SVOX has been profitable so the deal should be accretive to Nuance. If the numbers come out and Nuance paid more than $200M (their prior embedded acquisition of VST was about $300M!), that means there was some serious bidding going on – and probably with Google, Microsoft, or Apple (The Big Guys) in the mix, since they all could have used SVOX technology and patents.
  3. SVOX had Patents. SVOX acquired/merged with Siemens’ speech group a few years back, and with this merger came “60 patent families.” That’s a lot of patents, especially when you add on the patents that SVOX got before and after the merger with Siemens. This will continue to fuel Nuance’s tremendous patent position. My opinion is that it was quite a mistake for the Big Guys – especially Apple- to pass up this combination of talent, technology and patents…they could have easily outbid Nuance !
  4. Customer acquisition. OK, this was probably Nuance’s primary motivation, and probably the reason that Nuance would outbid companies wanting SVOX for “in-house” solutions. SVOX had a lot of deals in automotive and mobile handsets! They were very strong in small-to-medium footprint (1-50MB) TTS, and were making fast inroads with their speech recognition. Nuance loves to buy customers. SVOX had customers.
  5. Keeping Apple and Google from Acquiring SVOX. It’s not often that Apple loses, but I think they lost on this one. SVOX would have been a really cheap way for Apple to make a big move into speech with an in-house technology. It’s going to be hard to grow it all internally, but what a nice bootstrap SVOX would have been in patents and technologies! Google is one of SVOX’s customers for TTS (Hey – Nuance was one of the founding members of the Open Handset Alliance that developed Android!), but with Google’s hiring and acquisitions in the speech space, the writing was on the wall for SVOX to go the way of Nuance, and get designed out of Android for Google’s internal solutions. By keeping SVOX away from Apple and Google, Nuance has the opportunity to keep two huge customers (i.e. Google from SVOX and Apple) from jumping ship…but I still think it will happen eventually!
  6. Automotive Industry Contacts. I read the press release about advancing “the proliferation of voice in the automotive market”, and accelerating “the development of new voice capabilities that enable natural, conversational interactions” and about SVOX supplying the Client for Client/Server hybrid solutions. None of that market-speak makes my list. I think the technologies that SVOX had were pretty redundant to what Nuance has. SVOX had better customer relations and accounts in automotive…that was really the driver!

Anyways…I suspect the acquisition was a good deal for Nuance and its investors, and probably a GREAT deal for SVOX and its investors. Nuance’s market price didn’t seem to move much, but maybe it will once the price is disclosed. I commend and encourage Nuance to cut the lawsuits…one of them could bite back a lot worse than the pain of losing employees!

Todd
sensoryblog@sensoryinc.com

The Holy Grail in Speech is Almost Here!

May 6, 2011

For far too long, speech recognition just hasn’t worked well enough to be usable for everyday purposes. Even simple command and control by voice had been barely functional and unreliable…but times, they are a changing! Today speech recognition works quite well and is widely used in computer and smart phone applications…and I believe we are rapidly converging on the Holy Grail of Speech – making a recognition and response system that can be virtually indistinguishable from a human (a really smart human with immaculate spelling skills and fluency in many languages!)

I think there are 4 important components to what I’d call the Holy Grail in Speech:

  1. No Buttons Necessary. OK here I’m tooting my own whistle, but Sensory has really done something amazing in this area. For the first time in history there is a technology that can be always-on and always-listening, and it consistently works when you call out to it and VERY rarely false-fires in noise and conversation! This just didn’t exist before Sensory introduced the Truly Handsfree™ Voice Control, and it is a critical part of a human-like system. Users don’t want to have to learn how to use a device, Open Apps, and hold talk buttons to use! People just want to talk naturally, like we do to each other! This technology is HERE NOW and gaining traction VERY rapidly.
  2. Natural Language Interactions. This is a bit tricky, because it goes way beyond just speech recognition; there has to be “meaning recognition”. Today, many of the applications running on smart phones allow you to just say what you want. I use SIRI (Nuance), Google and Vlingo pretty regularly, and they are all very good. But what’s impressive to me isn’t just how good they are, it’s the rate at which they seem to be improving. Both the recognition accuracy and the understanding of intent seem to be gaining ground very rapidly.
    I just did a fun test…I asked each engine (in my nice quiet office) “How many legs does an insect have?”…and all three interpreted my request perfectly. Google and Vlingo called up the right website with the question and answer…and SIRI came back with the answer – six! Pretty nice! My guess is the speech recognition is still a bit ahead of the “meaning recognition”…
    Just tried another experiment. I asked “Where can I celebrate Cinco de Mayo?” SIRI was smart enough to know I wanted a location, but tried to send me off to Sacramento (sorry – too far away for a margarita!) Vlingo and Google both rely on Google search, and did a general search which didn’t seem to associate my location… (one of them mis-recognized, but not so badly that they didn’t spit out identical results!) Anyways, I’d say we are close in this category, but this is where the biggest challenge lies.
  3. Accurate Translation and Transcription. I suppose this is ultimately important in achieving the Holy Grail. I don’t do much of this myself, but it’s an important component to Item 2 above, and also necessary for dictating emails and text messages. When I last tested Nuance’s Dragon Dictate I was blown away by how well it performed. It’s probably the Nuance engine used in Apple’s Siri (you know, Nuance has a lot of engines to choose from!), and it’s really quite good. I think Nuance is a step ahead in this area.
  4. Human Sounding TTS. The TTS (text-to-speech) technology in use today is quite remarkable. There are really good sounding engines from ATT, Nuance, Acapela, Neospeech, SVOX, Ivona, Loquendo and probably others! They are not quite “human”, but come very close. As more data gets thrown at unit selection (yes, size will not matter in the future!), they will essentially become intelligently spliced-together recordings that are indistinguishable from live performance.

Anyways, reputable companies are starting to combine and market these kinds of functions today, and I’d guess it’s a just a matter of five to ten years until you can have a conversation with a computer or smartphone that’s so good, it is difficult to tell whether it’s a live person or not!

Todd
sensoryblog@sensoryinc.com

Conversation with an Analyst

April 21, 2011

I had an interesting email conversation with a blog reader last month, and I thought I’d share some of the dialog. He is an equity analyst (who wishes to remain anonymous) that follows some companies in the speech industry. He emailed me saying:

“I came across your blog some time ago and have been reading it since with great interest. A topic of particular interest to me has been your periodic comments about how Apple has lagged the investments made by Google in speech recognition technology, opting instead to lean on Nuance. I was also struck by your observation that big companies, such as Google, have a history of licensing Nuance technologies before eventually taking those capabilities in-house.”

This makes me feel the need to clarify something…Nuance has great technologies, period. When companies feel the need to bring the technology “in-house”, it’s not driven by a failing of Nuance, but simply the fact that the USER EXPERIENCE IS SO CRITICAL to the success of consumer products. It’s difficult for big companies like Apple, Google, Microsoft, HP and others that depend heavily upon positive consumer experiences to farm out the technology for such a critical component.

The conversation turned to Apple, and the equity manager asked about the all too common question of whether Apple might acquire Nuance. Here’s, roughly, how the conversation went:

Analyst: What is your current view on Apple’s efforts in this space? As a company they seem to take great pride in controlling the user experience and that extends to how they think about key technologies (witness the Flash vs. HTML 5 spat, for example). It makes me wonder if Apple would be satisfied relying on Nuance for such a visible and important capability or whether they’d feel the need to also bring it in-house.

Todd: Apple can definitely afford Nuance. In fact, Apple probably makes enough profit in a good quarter to buy Nuance outright. Nevertheless, it would be a BIG price tag, and not in line with Apple’s traditional acquisition strategy. I wouldn’t rule it out, but I wouldn’t say they “need” Nuance, either, but they do need to do something, and they know it. Apple has been posting job requisitions this year in the area of speech recognition, so they definitely want to bring more of the technology in-house. My guess is they’ll do some M&A in the speech technology area as well. Google and Microsoft have combined aggressive hiring with M&A, so it seems likely that Apple will go beyond the SIRI acquisition (which added an AI layer on top of Nuance) and acquire more core speech technology expertise.

Analyst: I agree with you that Apple makes/has enough cash to acquire Nuance, but that it would be out of character for Apple to do so. Where I’m most interested is whether there are meaningful technical/architectural reasons why Apple must partner with Nuance for SR, or if the gap between Nuance and these smaller players is narrow enough that Apple would acquire or partner more closely with one of the small guys in order to maintain more control over the technology. Many people seem to think that an SR acquisition would have to be of Nuance, but I’ve been told that there are many quality SR start-ups. If you had to bet, do you think that Apple needs the 800-pound gorilla Nuance in order to do a good job in SR, or would one of these smaller companies give Apple a sufficient base upon which to build out a solution?

Todd: I’m confident Apple will eventually own it. I’d say the odds of them buying Nuance though are quite low (10-30% as a wild guess). There’s no technical reason why they can’t use another technology, but the 3 best reasons they’d acquire Nuance are:

  1. Patents
  2. Language coverage
  3. Ease of integration

Apple’s in-house teams are quite familiar with the Nuance engines as they have already implemented them in some products. Apple is engaged in a lot of patent fights, and Nuance has the best portfolio of speech patents in the world – That’s a really valuable asset that the Google’s and Microsoft’s would probably fight over! Of course, for the cost of Nuance, someone could probably buy all of the other TTS and SR tech companies in the world! ;-)

Analyst: Apple really has a phobia about adding third-party software to their products. No Mosaic core in their browser, no audio compression codecs from Dolby or DTS, no Flash from Adobe…. They acquired two microprocessor design companies to create a proprietary stack on ARM chips rather than using broadly available chipsets from Qualcomm or Broadcom. Now comes the question of what to do with SR technology….

Todd: It will be interesting to see how this all unfolds. I suspect a lot of other large companies will want to get into the game as well. It could be that the cloud-based solutions for TTS and SR become generic and replaceable enough that there isn’t a need to bring them “in-house”. Of course, Sensory is hoping and betting on the need for the Client/Server approaches, where an embedded solution (like our Truly Handsfree Triggers) nicely complement the cloud-based offerings.

Todd
sensoryblog@sensoryinc.com