Voice recognition software vendor Nuance buys rival Swype

Deal for $102.5 million positions Nuance for next generation of smartphones

The company that makes the software powering the Siri voice recognition application in Apple's new iPhone 4S is positioning itself to be a mobile device power.

Nuance Communications, a vendor of speech recognition and digital imaging software, has purchased rival Swype Inc. for $102.5 million, Reuters reports.

Swype doesn't make voice recognition software, but like Nuance, it provides an alternative to typing on a keyboard or touchscreen.

From Reuters:

Swype, founded by Cliff Kushler, makes a keyboard that allows users to input words on a touchscreen device by sliding a finger or a stylus from letter to letter.

It is one of the most popular alternative keyboards for devices running on Google Inc's Android and Nokia OYJ's Symbian mobile-phone operating systems.

(Most popular for some people; I have Swype on my Droid 2 and don't really care for it. But that's just me.)

FBR Capital Markets & Co analyst Daniel Ives told Reuters that Nuance's acquisition of Swype has a motive quite familiar in the tech world these days.

"This is Nuance trying to own more patents," he said. "Ultimately, the company is going to have a much more integrated software set that they can sell to OEM and handset providers."

Nuance has been busy on the acquisition front in recent months. Last Friday it finalized the purchase of Loquendo, the speech technology division of Telecom Italia, for $75 million.

In July it purchased medical transcription and editing services vendor Webmedx for an undisclosed sum.

The company made two acquisitions in June, acquiring print management and cost recovery software vendor Equitrac and speech technology company SVOX, both for undisclosed sums.

The deal for Swype is mostly paid for, with Nuance already having given $77.5 million to Swype shareholders, according to a filing with the U.S. Securities and Exchange Commission.

Nuance is located in Burlington, Mass. Shares of the company (NASDAQ: NUAN) were down 30 cents, or 1.4 percent, to 21.60 on Friday.

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