Nuance Swipes Up Swype
It looks like Nuance Communications (NAS: NUAN) has added another text input specialist to its arsenal.
The newest addition to the armory is none other than Swype, maker of the popular virtual keyboard where you swipe your finger between letters instead of tapping. Think of it like the cursive of typing on an onscreen keyboard. It has been steadily gaining traction on Google (NAS: GOOG) Android phones and has shown no signs of slowing down, recently topping 50 million installations. Swype is also even available on Nokia (NYS: NOK) phones.
The price tag for the purchase rang up to $102.5 million in cash, with a $77.5 million down payment and the rest due in 18 months.
Swype isn't the only text-input-related acquisition Nuance has made. Back in 2007, it picked up Tegic Communications, maker of T9 predictive text software found on feature phones, from AOL (NYS: AOL) for approximately $265 million. Interestingly, both T9 and Swype were created by the same man, Cliff Kushler. It will be interesting to see how the family reunion goes and how Nuance will integrate the technologies together, if at all.
Nuance's specialty is voice recognition and is supposedly heavily integrated into Apple's (NAS: AAPL) new Siri assistant, which was announced alongside the iPhone 4S. The company is a key player in voice technology, which will give it a good foothold in the next growth area of intuitive input. Nuance is known to be a fierce competitor. Vlingo CEO Dave Grannan once said, "Competing with Nuance is like having a venereal disease that's in remission." Vlingo is also a voice technology company that has dueled with Nuance in court over the years.
This official Fool recommendation is also a serial acquirer, which adds another level of complexity to sorting through its books. As of the most recent quarter, Nuance's balance sheet was carrying nearly $3.1 billion in goodwill and net intangible assets out of its total assets of almost $4.1 billion. Those figures alone don't necessarily indicate weakness, but it's certainly something to be mindful of since they are very subjective.
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At the time this article was published Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Google and Apple. Motley Fool newsletter services have recommended buying shares of Google, Nuance Communications, and Apple; and creating a bull call spread position in Apple. 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.
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