What Happens to Apple Inc. If Samsung Buys Nuance?

Rumor has it that Samsung is looking to acquire Nuance, in a move that could potentially cripple one of Apple's key features. Can Apple find an alternate supplier or build an in-house solution?

Jun 17, 2014 at 6:00PM

Rumors broke earlier this week that Samsung (NASDAQOTH:SSNLF) may be interested in acquiring Nuance Communications (NASDAQ:NUAN). Such a deal would make sense for Samsung, which has been working hard to beef up its software prowess lately in order to complement its hardware strengths. Nuance already powers Samsung's S-Voice feature, along with other devices that use voice recognition. Furthermore, Nuance's core health-care segment could also complement Samsung's medical device business.

Apple (NASDAQ:AAPL) has long used Nuance's voice recognition engine to power Siri. Voice recognition engines are the behind-the-scenes layer that translates sounds into words; then the application software layer interprets that output. Apple likely has the rights to Nuance's engine under a long-term contract, although nothing is known publicly about the relationship. Additionally, Apple acquired U.K.-based Novauris in April, so it could be interested in building its own in-house engine.

Samsung could potentially afford to kill Apple's relationship with Nuance if the deal happens, which differs from the conglomerate's substantial hardware business with Apple. Still, Apple likely has enough visibility to arrange an alternative if need be.

In this segment of Tech Teardown, Erin Kennedy discusses Nuance's rumored sale with Evan Niu, CFA.

(relevant segment begins at 8:24)

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Erin Kennedy owns shares of Apple. Evan Niu, CFA owns shares of Apple. The Motley Fool recommends Apple, Google (A shares), Google (C shares), and Nuance Communications. The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), Microsoft, 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."

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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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