An Unexpectedly Vocal Threat to Apple's Siri

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Remember when Siri was the revolutionary feature in every Apple (NAS: AAPL) iPhone 4S? For a while it seemed Siri could do no wrong, despite being that rare "beta" product Apple was willing to foist on the masses before fully testing. Despite its problems, users seem happy with the voice-activated personal assistant -- a recent Parks Associates survey found that nearly three-quarters of its users are satisfied with its features, with more than half reportedly "very satisfied." Many would like to see Siri's functionality brought to their TV or other devices.

Those users might get their wish, though perhaps not in an Apple-approved format. Telecom titan AT&T (NYS: T) has its own plans for speech recognition, and that could serve to undermine Apple's perceived natural-language leadership.

Can you hear me now?
In just one month (and one day, as the initiative begins in June), AT&T will make its speech-recognition technology available to any software engineer with a good idea. Using all the application programming interfaces, or APIs, AT&T has built for speech-recognition purposes will cost developers a minuscule $99 registration fee, lower than the cost of a new iPhone and easily within reach of all but the most abjectly destitute programmer. The various APIs are built with specific purposes in mind, from searching for businesses to transcribing voicemail, and AT&T plans to increase the range of its offerings in the future.


This is a huge broadside to current speech-recognition software providers, given the difficulty of accurately translating speech to text and the complexity of designing the code to do so. Apple doesn't use its own code for that purpose, preferring instead to use Nuance Communications' (NAS: NUAN) expertise to drive Siri on the back end. Google (NAS: GOOG) and Microsoft (NAS: MSFT) both have their own in-house capabilities, though neither depends on speech recognition for revenue to anywhere near Nuance's degree. The broadside, then, is aimed right at Nuance's head. Big G and Mr. Softy might even make use of Ma Bell's auditory expertise in the future.

Keep in mind that Apple has been subject to rumors that it might open Siri's API to developers, though nothing firm has emerged. Given the greater potential breadth of an AT&T API, which could feasibly run on Apple devices as well as anything else that might use speech capabilities, the threat to Nuance's continued Apple-based growth can't be ruled out. Siri's great appeal is supposed to be its ability to manipulate other programs that don't have built-in speech recognition. Add that functionality to everything else and suddenly personal-assistant apps seem a little less useful.

Sound wave of the future
One major drawback to AT&T's initiative is that, like Siri's Nuance layer, it requires an Internet connection to tap into central processing servers. While online connections are pretty easy to find, they're not yet totally prevalent and not completely consistent, either. In the end, it does seem likely that voice control will only become more central to the way we use computers, as I discovered through a highly informal poll of Motley Fool readers last month. More than 400 voters chimed in, with only 6% believing that speech functionality would die out. Half think that it'll become a standard feature with no big winners, like a mouse or keyboard are today. AT&T's effort certainly supports that assertion, but time will tell if Siri can maintain her stardom or if she'll be forced into an ensemble role.

Speech recognition might not become the next big thing that can make you rich, but other technologies are still paving the way to wealth. Find out about one company behind "The Next Trillion-Dollar Revolution" in The Motley Fool's free report, still available for a limited time. Claim your free information now.

At the time this article was published Fool contributorAlex Planesholds no financial position in any company mentioned here. Add him onGoogle+or follow him on Twitter@TMFBigglesfor more news and insights. The Motley Fool owns shares of Microsoft, Google, and Apple.Motley Fool newsletter serviceshave recommended buying shares of Nuance Communications, Apple, Microsoft, and Google and creating bull call spread positions in Apple and Microsoft. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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