Nuance Communications has received a good amount of attention on reports that Apple is looking to partner with the voice recognition giant. Which side has more negotiating leverage? Hint: It's not Apple.
TechCrunch reported that Nuance may be used in Apple's data center in North Carolina. On Friday, TechCrunch reported Apple may partner or buy Nuance, which saw its shares spike on Monday.
Google's Android is clearly ahead on voice recognition. Microsoft has its TellMe unit for voice recognition. Faced with that competitive reality Apple has to use Nuance's technology and integrate it well.
If you were to handicap any talks between Apple and Nuance, the latter party may have an advantage. If Apple does have to pay up to partner with Nuance at least it won't be alone. Nuance's technology spans multiple verticals. You just haven't noticed. Nuance is partnered with IBM to bring Watson to healthcare. Ford's Sync is powered by Nuance voice recognition and becoming more conversational by the day. That robot you just talked to during a customer service call? Yup that's Nuance.
In other words, Apple will be just another Nuance partnership. Now Apple is clearly a consumer favorite, but Nuance has many customers just as impressive. It's just folks aren't paying attention.
Let's roll the customer base from Nuance's annual report.
These customers come to Nuance because it has the intellectual property locked down. Nuance has 2,100 issued patents and another 1,900 patent applications beyond that. So if Apple needs voice recognition mojo it can go to Microsoft, Google or Nuance. Hell will freeze over for the first two and that leaves Nuance.