Through a variety of acquisitions, Nuance Communications
The details released did not mention how much Nuance paid for MobileVoiceControl. However, in light of Nuance's market cap ($1.79 billion), there's a good chance that the price tag was less than $100 million. (Rumor pegs it somewhere less than the $15 million to $20 million range.)
MobileVoiceControl provides voice-activated services on a variety of devices, including gadgets from Research In Motion
This market opportunity is still in its early stages, with a projected total size of $300 million or so. Major competitors in the space include IBM
Nuance has one big advantage against its larger competitors: a treasure trove of patents, with more than 400 either issued or pending. And there are a myriad of other upstart companies it could buy to further build its intellectual property assets.
Unfortunately, Nuance's stock seems highly valued to me. The company's enterprise value is about 7.7 times its trailing-12-month revenues. Moreover, it had to borrow $349 million to finance its Dictaphone acquisition. For the third quarter, Nuance's interest expense was roughly the same as its operating income (or $7.3 million).
While Nuance is positioned nicely for a big market opportunity, such things take time. After all, people have mostly been accustomed to using mobile devices for calling people -- not browsing the Net, writing email and so on. Nonetheless, investors are valuing the stock as if the trend will emerge fairly quickly.
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