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Investors speculate Carl Icahn could push Apple to buy Nuance for speech tech

post #1 of 48
Thread Starter 
Carl Icahn's large position in Apple may be a move to force the iPhone maker to buy Nuance Communications, the speech recognition company that drives the some of the tech behind Siri, some investors believe.

siri


The theory was presented by the New York Post, which noted that Icahn has recently bumped up his stake in Nuance to 16.4 percent. The billionaire investor has stated that he thinks share of both Apple and Nuance are currently undervalued.

Icahn is notorious for attempting to block efforts by Dell to take the computer maker private. He has filed a number of lawsuits against the company, which he also owns a large stake in.

Some investors view Apple's reliance on Nuance's technology as a key reason to buy the company. Though it was long suspected, Nuance confirmed in May that its speech recognition helps power Apple's voice driven personal assistant software, Siri.

Nuance does not handle Siri's artificial intelligence layers, but its technology does provide the capability of Siri to interpret a user's voice. Nuance CEO Paul Ricci revealed earlier this year that his company is the "fundamental provider" of voice recognition for Apple.

Investors speculate that Apple could acquire Nuance for $7 billion ??an amount that could easily be afforded by the company, which is flush with cash.

However, Icahn has given no public indication that he's interested in a potential deal between Apple and Nuance. The billionaire investor has instead pushed for Apple to buy back more shares in itself, and plans to meet with Apple Chief Executive Tim Cook for dinner in September to discuss that possibility.

Icahn has said he believes that shares of AAPL are "extremely undervalued" at their current price. His support of the company helped to push Apple
post #2 of 48

It's not the worst idea in the world (albeit a big price tag for questionable advantage), but I wish Icahn would go and root around in someone's business.  Or someone else's trash, where he belongs.

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post #3 of 48
Some investors believe the earth is flat ....
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
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From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
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post #4 of 48
Apple won't do this. It's a bad buy for Apple. The high price tag of Nuance can't be justified. Apple's licensing costs for Siri are far less than purchasing the company outright. As for Icahn, he may be able to push around the boards of smaller and weaker companies, but he won't have much clout at Apple given it's management team continues to prove its abilities at the helm.
post #5 of 48

I don't know if acquisition of Nuance would help Apple a whole lot, but given Apple's interest in speech recognition, I'd like to see them hire Janet & Jim Baker as consultants, if they haven't already.  Then, if Nuance was bought, the Bakers would be perfectly situated to take it (the technology they invented) to the next level of excellence.  And there would be a modicum of justice in it, too.

 

Read how the Bakers were swindled out of their inventions, which Apple now exploits:

http://www.nytimes.com/2012/07/15/business/goldman-sachs-and-a-sale-gone-horribly-awry.html?pagewanted=all&_r=0

post #6 of 48

How in the world can this guy "push" Apple to do something? He is as releAFAIK, he is just a stock gambler, correct?

 

I do not fear this Icahn, I fear that he is just the begining. I hope they can only manipulate the stock but not the company itself.

post #7 of 48
The idea isn't about the licensing cost, but the ability to lock competitors out of top end speech recognition.
Nevertheless, I hate seeing a 2 bit gambler like Icahn meddling in business decisions.
post #8 of 48

Cook will not let Icahn tell Apple what to do. As to Icahn having a big position in Apple, what I have read is that Icahn's son is BIG on Apple. Unlike Icahn's mercurial ideas, I am sure Cook, as I can be sure of, is still running the company and Apple will NOT pay $7 bln for a software company. Would you trust New Yrok papers?

post #9 of 48
Carl icahn is a very influential guy. If anybody can make this happen, it is him. There is a reason why he is feared in the investment world. I hope Cook can stand up to him.
post #10 of 48
Thi
Quote:
Originally Posted by GQB View Post

The idea isn't about the licensing cost, but the ability to lock competitors out of top end speech recognition.
Nevertheless, I hate seeing a 2 bit gambler like Icahn meddling in business decisions.
This is what I thought about - do Google and Microsoft use Nuance as well? What alternatives exist? How easy would it be for competitors to find a replacement technology?
post #11 of 48
Quote:
Originally Posted by Crowley View Post

It's not the worst idea in the world (albeit a big price tag for questionable advantage), but I wish Icahn would go and root around in someone's business.  Or someone else's trash, where he belongs.

Agree wholeheartedly.

 

Nuance should be on Apple's list for the right price, but I'd start with Square and Parallels.

 

I seriously doubt, however, that Icahn will drive Cook's strategy in any way. Even if any or all of these acquisitions were to happen, it would be the equivalent of a rooster taking credit for making sun rise.

post #12 of 48
Quote:
Originally Posted by politicalslug View Post

Apple won't do this. It's a bad buy for Apple. The high price tag of Nuance can't be justified. Apple's licensing costs for Siri are far less than purchasing the company outright. As for Icahn, he may be able to push around the boards of smaller and weaker companies, but he won't have much clout at Apple given it's management team continues to prove its abilities at the helm.

I disagree. While I thought Apple should have bought them years ago (along with other companies) this is important to them. It isn't the licensing fees they should care about. It's the fact that their rivals are also using Nuance tech for their own voice services. Apple should have bought Nuance when they first decided to do Siri, before Google and Microsoft also decided to copy that service. It's late in the game for it, but Apple can afford it. They can also use some of that foreign cash for this.

This would be a maneuver to head off the competition. It's similar to Microsoft buying Skype for $8.5 billion. Not worth it in the sense of direct costs or profits, but prevents others from making a deal, or buying it themselves. Apple should have also bought that several years ago. Navicon is another company they should have picked up earlier, before Nokia did. they could have had the premier mapping company for the phone in 2007. They should have bought Imagination too. I can think of several others.
post #13 of 48

Haha, best comment of the day!

Great!

post #14 of 48
Quote:
Originally Posted by reydn View Post

Thi
This is what I thought about - do Google and Microsoft use Nuance as well? What alternatives exist? How easy would it be for competitors to find a replacement technology?

There is none. Even IBM pretty much gave up on this.
post #15 of 48
Quote:
Originally Posted by AppleInsider View Post

Icahn has said he believes that shares of AAPL are "extremely undervalued" at their current price. His support of the company helped to push Apple

...push Apple [full stop]

Helped to push Apple where to AI? Off a cliff? Into oblivion?
Send from my iPhone. Excuse brevity and auto-corrupt.
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Send from my iPhone. Excuse brevity and auto-corrupt.
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post #16 of 48
Quote:
Originally Posted by bobbyfozz View Post

Cook will not let Icahn tell Apple what to do. As to Icahn having a big position in Apple, what I have read is that Icahn's son is BIG on Apple. Unlike Icahn's mercurial ideas, I am sure Cook, as I can be sure of, is still running the company and Apple will NOT pay $7 bln for a software company. Would you trust New Yrok papers?

Calling the Post a New York paper is like calling Meyer Lansky a New York businessman.

The problem with the paper is not where it's published, but who's doing the publishing. I won't mention his name. Bad luck.

Interesting about Icahn's son, though.
post #17 of 48
It would be endlessly amusing if Tim dropped Siri from iOS just to spite Icahn.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #18 of 48
Wouldn't this start a bidding war for Nuance? Paying 7 billion for them is a lock out maneuver. If Apple wanted to buy Nuance it wouldn't remain just Apple that was interested for long. Icahn is a very shrewd man.
post #19 of 48
If Apple's competitors have perpetual licenses to Nuance technology then buying the company doesn't make a lot of sense.

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Please update the AppleInsider app to function in landscape mode.

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post #20 of 48
Quote:
Originally Posted by jd_in_sb View Post

If Apple's competitors have perpetual licenses to Nuance technology then buying the company doesn't make a lot of sense.

Having lunch with Icahn doesn't make a bit of sense either.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #21 of 48
Quote:
Originally Posted by Doctor David View Post

Wouldn't this start a bidding war for Nuance? Paying 7 billion for them is a lock out maneuver. If Apple wanted to buy Nuance it wouldn't remain just Apple that was interested for long. Icahn is a very shrewd man.

Indeed, investment return is his only interest and this is how it starts. Idle chatter with a couple of analyst chums, get the NYT to take the bait, alert other companies to the fact that Nuance might be for sale and who wouldn't want Apple to own it...etc...etc
I doubt Icahn cares a toss either way, be it MS, Apple or someone else, just as long as his stake gets a big boost. Hope Tim Cook keeps some distance from this man.
post #22 of 48
Quote:
Originally Posted by melgross View Post


There is none. Even IBM pretty much gave up on this.
 
Would there be a risk of Holder and the "Justice" Department coming after Apple on this then?  
post #23 of 48
I think it would be a good idea. Nuance has other useful assets that Apple could use. I think Apple should add OCR capabilities to Cocoa framework/API and as and iCloud service for developer apps.


"Integrate Microsoft%u2019s robust cloud-based optical character recognition capabilities into your Windows 8 and 8.1 Store XAML C# apps..."
http://datamarket.azure.com/dataset/bing/ocrcontrol
post #24 of 48
If Icahn cares so much, he should buy Nuance and give to Apple as gift!

Otherwise, mind your own business.

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Tim Cook ~ The Wall Street Journal - February 7, 2014

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....the lack of properly optimized apps is one of the reasons "why the experience on Android tablets is so crappy".

Tim Cook ~ The Wall Street Journal - February 7, 2014

Inside Google! 

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post #25 of 48
The Post is clueless. Nuance just adopted a poision pill and is not likely up for sale. Nobody can buy more than 20% of the stock. They would have to hold their arms open to an Apple purchase and that isn't likely as there are no strong reasons to justify this. Apple has likely got a long term licensing deal in place and doesn't need more than that.
post #26 of 48
Quote:
Originally Posted by Disturbia View Post

If Icahn cares so much, he should buy Nuance and give to Apple as gift!

Otherwise, mind your own business.

He can't. When he upped his stake, they adopted a poison pill so that if he buys more than 20% they can print new shares and sell them to drive his (or anyone else's) stake back to 20%.
post #27 of 48
Quote:
Originally Posted by Frac View Post

Indeed, investment return is his only interest and this is how it starts. Idle chatter with a couple of analyst chums, get the NYT to take the bait, alert other companies to the fact that Nuance might be for sale and who wouldn't want Apple to own it...etc...etc
I doubt Icahn cares a toss either way, be it MS, Apple or someone else, just as long as his stake gets a big boost. Hope Tim Cook keeps some distance from this man.

I share your concerns but I think Tim needs to meet with him. Icahns influence on companies is from his deep pockets and his market smarts. If he's prowling around anyway you might as well see if you can find anything useful out. He is a very powerful person, no sense snubbing him if you're not going to gain from it. I think Tim is a master at keeping the cards close to his chest. Not that Icahn couldn't be a problem for Apple or that Tim Cook is a magician. But I think They're doing the right thing.

TL;DR: Carl Icahn needs to be handled. Tim Cook can do that.
post #28 of 48
Originally Posted by eponymous View Post
Would there be a risk of Holder and the "Justice" Department coming after Apple on this then?  

 

Yes.

 

"Why?"

Because that's what they do.

post #29 of 48
Quote:
Originally Posted by Phone-UI-Guy View Post

The Post is clueless. Nuance just adopted a poision pill and is not likely up for sale. Nobody can buy more than 20% of the stock. They would have to hold their arms open to an Apple purchase and that isn't likely as there are no strong reasons to justify this. Apple has likely got a long term licensing deal in place and doesn't need more than that.

Most publicly traded companies in the US have poison pills. That is fairly standard. There are many legal ways to work around it -- acquirers do it all the time.

 

In any event, your point is moot since an acquisition of this sort would be 'friendly'. I doubt that Apple will ever do a 'hostile' deal. In such friendly deals, target company boards usually rescind the pill.

post #30 of 48
Quote:
Originally Posted by SpamSandwich View Post

Quote:
Originally Posted by jd_in_sb View Post

If Apple's competitors have perpetual licenses to Nuance technology then buying the company doesn't make a lot of sense.

Having lunch with Icahn doesn't make a bit of sense either.

Tim wants to steal his French fries
post #31 of 48
Quote:
Originally Posted by TeaEarleGreyHot View Post

I don't know if acquisition of Nuance would help Apple a whole lot, but given Apple's interest in speech recognition, I'd like to see them hire Janet & Jim Baker as consultants, if they haven't already.  Then, if Nuance was bought, the Bakers would be perfectly situated to take it (the technology they invented) to the next level of excellence.  And there would be a modicum of justice in it, too.

 

Read how the Bakers were swindled out of their inventions, which Apple now exploits:

http://www.nytimes.com/2012/07/15/business/goldman-sachs-and-a-sale-gone-horribly-awry.html?pagewanted=all&_r=0

 

Fantastic article, thanks very much for posting.  Everyone in tech should read this.  I did a quick search for trial results, and it doesn't look like it went well for the Bakers, but what I saw didn't really have any details, nor any information about appeals.

 

For me, the key is that you never trust any one source.  Not only with "internet research", but investment advice, M&A, whatever.

No Matte == No Sale :-(
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No Matte == No Sale :-(
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post #32 of 48
Quote:
Originally Posted by reydn View Post

Thi
This is what I thought about - do Google and Microsoft use Nuance as well? What alternatives exist? How easy would it be for competitors to find a replacement technology?

Not sure about Microsoft, but according to an earlier AI article (http://forums.appleinsider.com/t/157774/nuance-confirms-its-voice-technology-is-behind-apples-siri):

 

Quote:

...Nuance doesn't do voice recognition only for Apple. In addition to the company's own Dragon dictation software, Nuance works with Samsung ? presumably on that company's S-Voice Siri competitor ? and other companies to develop voice applications on Android.
 
Nuance, however, is not involved with Google's speech-recognition effort, Google Now. That feature ? recently brought to iOS and even more recently named in a Siri patent suit? is thought to have largely derived from Google's own voice recognition efforts and voice services.
post #33 of 48

I don't think Apple will buy Nuance at 5 to $7 Billion for many reasons in addition to the price.

 

Nuance has excellent voice recognition but their other products can be undermined.  I think Carl Icahn realizes this.

 

When Visioneer + ScanSoft bought Dragon Systems/Nuance, they got excellent voice recognition that gives them an advantage and pushed their original ScanSoft imaging scanning product to the background.  Nuance has since licensed the voice recognition to many other companies including Apple.  They have also purchased other companies such as Dictaphone and BeVocal to build up their products arsenal.

 

The companies licensing the voice recognition from Nuance can undermine Nuance's other products.  Apple will soon undermine their car voice recognition products products  to some extent with iOS in the car. Apple's SIRI speech/voice system in iOS 7 demonstrated at WWDC will beat Nuance and the other licenses. Note that speech and voice recognition go together and Apple certainly wants to differentiate itself from the other Nuance licenses.

 

If Apple can enhance the Nuance voice recognition technology or better yet come up with it's own voice recognition to match or beat Nuance, Nuance would quickly be in big trouble.  

 

Considering the market cap of Nuance and licensees that it has, and Apple's goal to differentiates itself, it makes more sense for Apple to keep licensing from Nuance until Apple can come up with it's own voice recognition system that is at least as good as Nuance's system.


Edited by AppleSauce007 - 9/2/13 at 12:57pm
post #34 of 48
What about Grokr? Did Apple ever buy them? That would probably be a more useful acquisition.
post #35 of 48

How the **** could an investor "push" Apple to do anything, especially such a massively expensive and strategic move? If Apple thinks that buying Nuance will best serve its interests, then it will do so. If it doesn't, I don't see how someone like Icahn, who knows nothing about whats best for Apple's strategic interests or its consumers, can convince Apple to do so. 

post #36 of 48
Quote:
Originally Posted by melgross View Post

There is none. Even IBM pretty much gave up on this.

How long did it take Google and Microsoft to create their proprietary voice recognition technologies? Neither of them license Nuance as far as I know. 

 

Is Apple incapable of perfecting their own in-house solution? I remember they did have a basic voice recognition feature back in 1993.

 

Which competitor would Apple be preventing from using Nuance licensing if they did buy it?

 

Samsung? As far as I could find out they don't use Nuance either. They have something called Vlingo.

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post #37 of 48
Quote:
Originally Posted by Slurpy View Post

How the **** could an investor "push" Apple to do anything, especially such a massively expensive and strategic move? If Apple thinks that buying Nuance will best serve its interests, then it will do so. If it doesn't, I don't see how someone like Icahn, who knows nothing about whats best for Apple's strategic interests or its consumers, can convince Apple to do so. 

 

ICahn can not push Apple nor Nuance for that matter but he does own 17% of Nuance and over a Billion invested in Apple, so he has some pull.

 

He could be more of an ally to Apple if it came to a Nuance purchase.  It would also be better for him if Apple bought Nuance at this point.

post #38 of 48
Quote:
Originally Posted by reydn View Post

Thi
This is what I thought about - do Google and Microsoft use Nuance as well? What alternatives exist? How easy would it be for competitors to find a replacement technology?
No, Google does not use Nuance licensed voice recognition, having developed their own just as Microsoft has. Nuance, Google and MS all use IBM patents in their speech recognition products tho AFAIK.

EDIT:
I thought I remembered a previous article here at AI and here it is:
http://appleinsider.com/articles/13/05/30/nuance-confirms-its-technology-is-behind-apples-siri

"Ricci went on to note that Nuance doesn't do voice recognition only for Apple. In addition to the company's own Dragon dictation software, Nuance works with Samsung — presumably on that company's S-Voice Siri competitor — and other companies to develop voice applications on Android.

Nuance, however, is not involved with Google's speech-recognition effort, Google Now. That feature — recently brought to iOS and even more recently named in a Siri patent suit — is thought to have largely derived from Google's own voice recognition efforts and voice services. "
Edited by Gatorguy - 9/2/13 at 4:07pm
melior diabolus quem scies
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melior diabolus quem scies
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post #39 of 48
Apple buying Nuance seems highly unlikely. Not only did Nuance institute the "poison pill," but Apple seems to be developing its own in-house voice tech. I remember Apple coming out with patents >1 year ago dealing with with is topic, particularity as it related to naturalistic speech and speech prosody (a reported new improvement with Siri). Also, there was that report not too long ago about Apple putting together a voice tech team in Boston, made up primarily of poached Nuance employees. I'm looking forward to seeing (hearing) what they come up with by the time Siri comes out of beta.
Edited by PatchyThePirate - 9/2/13 at 1:55pm

   

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post #40 of 48
Quote:
Originally Posted by politicalslug View Post

Apple won't do this. It's a bad buy for Apple. The high price tag of Nuance can't be justified.
Actually I see it as highly justified.
Quote:
Apple's licensing costs for Siri are far less than purchasing the company outright.
Costs are nothing, it is about control.
Quote:
As for Icahn, he may be able to push around the boards of smaller and weaker companies, but he won't have much clout at Apple given it's management team continues to prove its abilities at the helm.

Baloney! Once you own a significant amount of stock you can force a company to do anything. The one ugly thing about the stock market is that it is very democratic in that anybody can buy your stock be that a saint or a sinner. If you end up being owned buy the wrong people they can milk you for every cent you make, compel you do make stupid business decisions and have you focused on the wrong issues. Many a good company in America has failed due to its stock falling into the wrong hands. You need to remember many people are in the stock market for ony one thing, that is to make money for themselves. They will do so at the expense of others without even thinking about it.
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