Automotive > Infotainment & Telematics Blog

Samsung Can Buy Automotive Market Credibility with Nuance Acquisition

by Roger Lanctot | 6月 17, 2014

The Wall Street Journal and Bloomberg News are reporting rumors of a potential acquisition of Nuance Communications by Samsung and/or private equity investors. Nuance's voice recognition technology is implicated in both Apple's Siri and Google's Google Now VR services.  Speculation in multiple online news sources suggest a potential price tag of $7B.

The news comes on the heels of Nuance’s failed bid to win Toyota’s telematics service business in the U.S. working in concert with the recently acquired Tweddle Connect.  In spite of its failure to win the Toyota deal, Nuance's acquisition of Tweddle pointed to Nuance's shift toward becoming more of a full-service cloud application provider.  The Samsung rumor also precedes the expected emergence of Tweddle's Seattle neighbor, VoiceBox, as a potent competitor in the automotive space (working in partnership with AT&T and its Watson VR solution or simply offering its own VR product).

Samsung is the single most motivated potential buyer for Nuance in the world.  Samsung is seeking a non-hardware competitive edge in the mobile  market as well as a value-added avenue into the automotive market.  Google and Apple both have non-hardware assets (operating systems, application developer partnerships, service delivery platforms) that Samsung lacks to enhance the value of and to differentiate its hardware in the automotive market in particular - though mobile is no-doubt the higher priority.

A rumor story like this is reminiscent of the rumors that swirled around Waze shortly before the  $1B Google acquisition of that company.  The rumors could be intended to force any acquiring party to pay dearly - whether it is Samsung, Apple, Google, Facebook or Amazon.  If Nuance is the source, it could mean either that Samsung is balking at the price or that Nuance wants to make sure all bids are in.

It is good news in any event for all competing voice technology suppliers around the world.  True or not the news will motivate investors – as if they needed more incentive - to pursue the already overheated VR application space.  Immediate beneficiaries include VoiceBox and Audience as well as Microsoft (Cortana) and a host of smaller providers in the voice space.

But Samsung arguably has the most to gain from a Nuance acquisition - particularly in the automotive space.  With Nuance, Samsung will instantaneously establish itself in digital dashboards throughout the world along with a cloud-based platform for content and application delivery in connection with its DriveLink MirrorLink smartphone connectivity technology.

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