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Instant Analysis: Apple, Inc. Acquires AI Startup Emotient

By Evan Niu, CFA - Jan 7, 2016 at 1:45PM

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The tech titan scoops up a startup that specializes on reading people's emotions through facial recognition.

What happened?
Apple (AAPL 2.62%) has acquired a small start-up that specializes in artificial intelligence and facial recognition, according to The Wall Street Journal. Emotient analyzes facial expressions to gauge people's emotions. There are three key performance indicators that Emotient assesses: attention, engagement, and sentiment, and the small company offers customer insight services to companies to see how consumers respond to marketing, product, or service experiences.

Emotient emphasizes that "emotions drive spending," highlighting its value proposition when it comes to market research.

Does it matter?
The Mac maker regularly scoops up smaller companies that are under the radar, and it has dramatically increased the rate at which it acquires companies. Whenever the market or the media catches wind of it, it confirms the acquisition and issues the typical response without providing any additional insight.

While it seems that Emotient's technology could be useful in focus group settings, Apple famously never uses focus groups. But image recognition and facial detection are emerging technologies that many tech giants are investing heavily in, particularly those companies that help users store, manage, and search personal photo libraries.

At the same time, many companies are researching deep learning and other AI technologies. Just a few months ago, Apple also acquired VocalIQ, another AI start-up that specializes in speech-recognition technology. It's not a stretch of the imagination that perhaps Apple wants to bolster Siri's AI capabilities, perhaps eventually giving the virtual assistant the ability to recognize people's voices and emotions through an iPhone camera.

Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends 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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