Two Upstarts Join Forces to Take on Apple
Voice technology firm Nuance has agreed to buy its top rival, the start-up Vlingo, in an attempt to take on Apple's iPhone 4S voice assistant. The terms were not disclosed.
Nuance recently made headlines for its role in Apple's Siri—the company powers the voice assistant's backbone. Cambridge, Mass-based Vlingo, founded in 2006, is often referred to as the Siri of Android. Upstart Vlingo is a major competitor of Nuance's, not to mention a thorn in the company's side. The two companies have tussled in court for years over patent infringement.
Vlingo’s founders, John Nguyen and Mike Phillips, started the company in 2006 after leaving Speechworks, another speech software company, which merged with Nuance in 2005.
“Inspired by the introduction of services such as Apple’s Siri and our own Dragon Go!, virtually every mobile and consumer electronics company on the planet is looking for ways to integrate natural, conversational voice interactions into their mobile products, applications and services,” Mike Thompson, senior vice president of Nuance Mobile, in a statement. “By acquiring Vlingo, we are able to accelerate the pace of innovation to meet this demand.” (Nuance estimates that with consumer interest and demand for virtual assistant and voice-enabled capabilities exploding, there is a $5 billion market opportunity.)
In 2008, Vlingo raised $20 million in venture capital from investors including Yahoo and Boston-area VC firms Charles River Ventures and Sigma Partners.
Burlington, Vt.-based Nuance has been on a buying spree: In October, the company shelled out a reported $102.5 million for another competitor, texting technology company Swype. Swype's co-founder Cliff Kushler created T9 technology and Nuance's T9 predictive text software is used in over 3 billion mobile phones worldwide. (Kushler developed the T9 text input software at Tegic Communications, which was sold to AOL in 1999, and in 2007, sold to Nuance.) Swype's signature product is touch-screen predictive texting.
Earlier this year a jury in Federal District Court in Boston vindicated Vlingo, saying the company had not—as Nuance claimed—infringed any of Nuance's patents, including ones for software that recognizes human speech patterns. But the same jury also affirmed a Nuance patent that Vlingo had claimed was invalid.
In a strongly worded statement following the verdict, Vlingo founder and CTO Phillips called the Nuance lawsuit “distasteful” and an “abuse of the legal system” that “stifles innovation.” Nuance called the verdict "mixed."
Inc. contributing editor Courtney Rubin was for five years a London-based staff writer for People magazine. Rubin, a former senior writer for Washingtonian magazine, has written for the New York Times magazine, Time, Marie Claire, and other publications. She is the author of The Weight-Loss Diaries.