Voice recognition and superfast keyboarding both fit the definition of “killer apps” for smartphones, and now Nuance (NASDQAQ NUAN) will have both these technologies. The app maker is spending $102.5 million to acquire Seattle’s Swype, Inc., creator of an app that lets users type more than 40 words per minute by dragging their fingers across the keyboard without actually pushing the keys. Swype is currently available on about 50 million Android and Symbian phones, including phones made by HTC, Motorola, and Samsung, and it is also available on Samsung’s Galaxy Tab tablet. Swype is not currently available for Windows Phones, but one of the company’s investors is Nokia Growth Partners, so a Windows version may well be in the works.
Other investors in Swype include Samsung Ventures, Benaroya Capital, DoCoMo Capital and Ignition Partners. Shareholders will get $77.5 million at closing, and another $25 million in 18 months, subject to certain conditions. The 8-K filing says that one of these conditions is that “certain key executives not terminate their employment with Nuance or have their employment terminated for certain reasons.” Swype currently has more than 80 employees.
Swype is the brainchild of Cliff Kushler, one of the inventors of T9, another app for speeding up typing by predicting what the user is trying to type. T9 was acquired by Nuance in 2007, so now Nuance will probably try to combine Swype and T9 or retire T9 since it competes with Swype.
The acquisition raises the possibility of a new predictive text app that will respond to voice dictation. Swype has already made some progress in this area. According to the company website, “Swype can be, and has been, integrated with various 3rd party speech recognition and handwriting input methods.”
Massachusetts-based Nuance is best known for its Dragon Dictate speech recognition software. The product has a high profile in the healthcare field, but is also used in many other industries, including energy, retail to aumotive products.
