However, Nuance's voice recognition products also have a major presence in the artificial intelligence and health care fields -- two major areas of growth benefiting from the rising demand for more cloud-based products and services.
Bringing Wintermute to life
Most of Nuance's products aren't as easily recognizable as those from Apple or Google (GOOGL 1.33%), but they are equally ambitious, if not more so.
Nuance's Project Wintermute (sarcastically named after the insane AI of William Gibson's Neuromancer) is aiming to become the first cross-platform synchronized cloud assistant that can cross all boundaries between devices, brands, and operating systems. This means that if users were to pause a song or video on their Android phones, it could be resumed from the same spot on a different device, such as a tablet or a PC.
Wintermute originated from Nuance's Dragon TV voice control system, which was designed for set-top boxes, cable boxes, and smart TVs. The voice recognition system is a major improvement over Siri in that it understands complex, casual commands, such as "keep playing the song I was listening to" or "throw on the game." Like Siri, Wintermute is also programmed to interact with more natural and possibly humorous responses.
Building the perfect, seamless cloud
Although Wintermute is still in the early stages of development, it will be a step up from current cloud services. For example, Google's cloud-based ecosystem -- which includes Maps, YouTube, Chrome and other services -- can save favorites, preferences and settings over the Internet so they can be accessed from other devices. However, with the exception of Google Docs, these settings and changes are not saved in real time. For example, a YouTube video can be saved, but not resumed, from another device.
More importantly, Wintermute saves a user's queries and learns from them in a similar way to Google's collection of stored Internet data, to predict future behavior and needs.
However, both Google and Apple are working on their own projects. Google is following up on AI pioneer Geoffrey Hinton's research, known as "deep learning" technology, and Apple is working on a "Nuance-free" version of Siri that could cut the company out of the loop.
Applications in health care
That desire to create a perfect cross-platform cloud solution opens the door to fascinating opportunities in the health care industry, where real-time results are a necessity in medical situations.
Nuance's health care business is already booming. Last quarter, the company's health care unit reported a 29.1% year-on-year gain in revenue -- a stark contrast to its slumping mobile and consumer business, which reported a 16.2% decline. Nuance's main health care products include Clintegrity 360, Dragon Medical 360 and PowerScribe 360 -- all of which use voice capture, recognition, and documentation to aid physicians in the improvement of their daily workflow.
A major backer of Nuance's health care technology is health care IT giant Cerner (CERN). In March, Cerner integrated Nuance's CDI (clinical documentation improvement) technology with its EHR (electronic health record) services to improve the quality and accuracy of its patient data. The integration will help Cerner meet ICD-10 standards -- a classification system that medical facilities are required to meet by October 2014. Nuance's PowerScribe 360, which is used for radiology reporting from an iPad, has also been connected to Cerner's Radnet radiology information system.
Since all of Nuance's health care services are heavily dependent on CLU (clinical language understanding) voice recognition, adding a learning AI like Wintermute to its health care portfolio could enhance CDI and EHR services significantly. Wintermute's ability to effortlessly cross between platforms could also improve the design of mobile EHR programs, which are currently either categorized as "second screens" for desktop-based EHRs or native iPad applications.
A Foolish final thought
Investors should keep a close eye on the rising demand for voice recognition software in the health care market, which is being fueled by the increased usage of mobile EHRs and CDI services.
In this field, Nuance has a promising head lead over Google and Apple, which have both been more focused on the consumer market. However, both companies could close that gap soon with their own voice recognition and AI engines, and the health care industry would be a very lucrative area to expand into.