Microsoft (NASDAQ: MSFT) has acquired yet another popular mobile app. Earlier this month, the Windows-maker purchased third-party keyboard SwiftKey for an undisclosed amount.
This is the fourth major mobile acquisition the company has made in the last 14 months, and underscores Microsoft's increasing commitment to cross-platform compatibility.
More than 300 million devices
The market for third-party keyboards is competitive, but SwiftKey has been widely praised. The Verge labeled it the best keyboard for the iPhone last year, and the second-best keyboard for Android devices. Microsoft's own mobile keyboard has garnered a similar reception, but remains restricted to its embattled mobile platform, Windows Phone.
The Financial Times reported that the deal was fueled, largely, by SwiftKey's artificial intelligence assets. SwiftKey offers a fast and fluid typing experience, but really excels over its competitors in its ability to predict. "[It] has the best word prediction you can get. The word prediction is so good that oftentimes I don't even need to type any words -- SwiftKey already knows what I'm planning to say," wrote The Verge's Dan Seifert. SwiftKey says its technology has saved users some 10 trillion keystrokes -- or about 100,000 years of collective time. Microsoft plans to use SwiftKey's technology to improve its own Windows platform.
Yet SwiftKey also gives Microsoft access to hundreds of millions of mobile users. SwiftKey has been available in the Google Play app store since 2010, and the iTunes App Store since 2014 (when iOS first permitted third-party keyboards). Initially it carried a price tag of around $4, but later embraced the freemium model. Some phone manufacturers, notably Samsung, have licensed SwiftKey to power their own mobile keyboards. This has allowed SwiftKey to rack up hundreds of millions of users over its relatively short history -- its technology powers some 300 million mobile devices across Android and iOS today.
Slowly taking over your phone
SwiftKey is just the latest in a series of mobile acquisitions by the Redmond tech giant. In Dec., 2014, Microsoft acquired mobile email start-up Acompli. A few months later, it bought Sunrise Calendar. Both were widely praised as among the best mobile email and calendar apps available. Microsoft later rebranded Acompli as Outlook for mobile, and has been slowly integrating Sunrise Calendar into Outlook. Last June, Microsoft acquired Wunderlist -- a popular to-do list application.
Microsoft CEO Satya Nadella has highlighted these acquisitions in the company's quarterly conference calls.
"More than 1 billion to-do lists have been created so far in Wunderlist," said Nadella on the company's Oct., 2015 earnings call. "There are...over 30 million iOS and Android active devices running Outlook," he said in January.
None of these moves have been accretive to Microsoft's revenue -- at least not directly -- but they strengthen the relationship Microsoft has to mobile users, and enhance its larger ecosystem. Outlook for mobile, for example, encourages its users to store files on Microsoft's OneDrive. OneDrive, in turn, works well with Microsoft's desktop operating system Windows 10, and its digital personal assistant, Cortana.
Last month, The Verge reported that Microsoft was internally testing a version of its Windows Phone keyboard -- called Word Flow -- for iOS. The acquisition of SwiftKey lends credence to that report, and Microsoft may -- in a similar fashion to Acompli or Sunrise -- rebrand SwiftKey for iOS and Android as its own Windows keyboard. "In the coming months, we'll have more to share about how we'll integrate SwiftKey technology with our...Word Flow," wrote Microsoft.
With less than 2% market share, Microsoft is largely irrelevant when it comes to mobile phone platforms. But with a growing slate of excellent mobile apps, it's more relevant to mobile users than ever before.
Sam Mattera has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.