Nuance and Samsung Acquisition Talks Leave Apple in the Cold

Are the new rumors something Apple should fear?

Jun 16, 2014 at 3:57PM

Today, news broke that Nuance Communications (NASDAQ:NUAN) and Samsung (NASDAQOTH:SSNLF) have held acquisition talks. The news eventually led to Nuance being halted due to volatility, but the end result should have sent a chill through Cupertino, as an Samsung/Nuance merger could have huge ramifications on Apple's (NASDAQ:AAPL) iPhone.

Wasn't this supposed to be Apple?
As it's been widely reported, Apple's Siri is powered by Nuance. A couple of years ago, Apple co-founder Steve Wozniak had the Internet on fire when he mentioned in passing that Apple had acquired the voice recognition company. Of course, those rumors later proved untrue but the rumor mill burned slowly for this deal. It briefly reignited when Carl Icahn disclosed his stake in Apple; the investing community is well-aware of his stake in Nuance and his son's appointment to the board of directors.

A Siri-less Apple?
The big risk to Apple is losing Siri. Apple has been lukewarm about admitting it, but it is widely reported that Apple's "digital assistant" is powered by Nuance. When Siri was first introduced, it was considered a massive step forward in the phone's evolution. The company planned a huge ad blitz centered around the function and Apple went on to sell 4 million iPhone 4s units its first weekend – much more than the 1.7 million iPhone 4 units in its first weekend.

Moving forward to today, Apple is coming out of the doldrums on the back of a successful iPhone 5s launch, a great earnings report, and a recently completed stock split.
AAPL Chart

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If this rumor ends up being true, and Siri is lost from the iPhone, this will be a huge blow to the iPhone line and a risk to Apple's fantastic year.

Foolish final thoughts
It is important to understand that while this is a fast moving story, we shouldn't get too far ahead of ourselves with speculation. The risk to Apple is there, but don't put it past Cupertino's finest to secure Siri's functionality going forward – either by a deal with the acquirers or making an in-house solution. In the meantime, it will be interesting to see what happens to Nuance – and to watch Samsung's strategy going forward.

Bigger than Siri: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Jamal Carnette has no position in any stocks mentioned. The Motley Fool recommends Apple and Nuance Communications. The Motley Fool owns shares of Apple and Nuance Communications. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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