Dragon Voice Boosting Speech Recognition Machinery
Shweta is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The hot market of Speech Recognition software is reporting startling benefits for its developers. Today, I have picked up Nuance Communications (NASDAQ: NUAN) which has recently launched a hands free technology Dragon Mobile Assistant (Beta). The software was launched as voice control for Android 4.0 devices in the Google Play app market. The launch will be an add-on to its existing portfolio of speech recognition software and drive market value for the company. I start the analysis with its 1Q 2013 earnings for the quarter ending September. The company has achieved exceptional earnings in its major segments and along with its new partnerships it is showing signs of extending solutions and markets.
Let’s have a brief look at its major segments revenue
- Healthcare has been up 33.6% Y/Y; driven by new bookings from Beaumont, Franciscan Health System, Kettering Healthcare, etc.
- Mobile & Consumer sales up 32.7% Y/Y; driven by behemoth customers including Acer, Amazon, Audi, Samsung, etc.
- Enterprise up 11.5%; driven by the strongest bookings with new deals from C Spire, Citigroup and USAA.
- Imaging up 25.5%; major drivers were new contracts from Amazon.com, Canon, EMC and Deloitte.
On the competition platform, Nuance competes with Google (NASDAQ: GOOG) on the Voice front. Nuance provides voice recognition to Siri for the Apple’s iPhone. Siri serves as a voice recognition service for buying movie tickets, making reservations at restaurants. It has been a major point of difference between Android and iPhone. It is more of a transactional app rather than a search engine. Google’s voice search also known as Search by Voice is more of a search engine for users queries allowing users to search on Google by speaking through a mobile or tablet. Its Voice Action feature supports Android phones allowing users to give voice commands instead of typing. But as against the Nuance tech availability in 20 different languages, Google’s voice search is limited to few languages only such as English, French, Italian, German and Spanish.
Coming on to its partner and competitor IBM (NYSE: IBM) in the speech recognition market, Nuance has signed a deal with IBM to interact with the medical teams to learn medical concepts. IBM (which, I have covered in detail here) and Nuance have entered into a partnership to make its “super computer” into “super Siri” and apply the natural language platform to healthcare. The purpose is to apply the combining power of Nuance’s speech recognition and Watson’s computer power of answering questions to help improve medical designs and treatment by working with Columbia University Medical Center and the University Of Maryland School Of Medicine.
Going forward Nuance has positioned itself well for flowing revenue streams backed by strong position through its innovative offerings detailed below.
Under the mobile unit, Nuance signed a deal with Samsung earlier in 2012 to power Sammy's 2012 Smart TVs with its Dragon Voice technology. The software allows users to command TV in a more interactive way to change channels, search online, access Samsung’s Smart Hub and connect with friends via speech commands. Both the companies are introducing new ways through their cool technology to talk with the TV in a better way. Given that Nuance’s technology works in 20 different languages in addition to the latest statistics such as the one which states that Samsung has sold over 1.5 million TV sets alone in the US region in October month gives positivity for the technology in the long haul.
Later on in September 2012, Nuance signed a deal with Intel for its Ultrabook through the Dragon Assistant Beta. The innovative software allows users to search online, find content, play music, check and reply to email, update social statuses via voice commands. The Dragon Assistant Beta will pioneer its launch with Dell XPS13 Ultrabook scheduled to deliver in Q4 2012.
Under the Imaging segment Nuance has partnered with Intelerad under a reseller agreement. Nuance’s market leading voice-enabled radiology reporting offering will help Intelerad’s customers with efficient and accurate reporting creating high quality documentation and exam interpretations while ultimately reducing the report turnaround time.
Summing it up, its market dominant voice recognition software is gaining traction in the market with new contract winnings. It has already seen incremental revenue in the last quarter from new contracts earned in 2012. With the voice and language services market in new gadgets with its key customer’s base, it will benefit the investors in the long term. With strong backing of financials such as forward P/E of 10.31 and EPS of $0.51 reporting a growth of 27%, the stock looks appealing.
ShwetaDubey has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!