After all the hype and run-up into earnings, Apple's voice recognition provider Nuance missed and guided below expectations.
What people don't understand is that as sexy as voice is, it's almost a commodity. Manufacturers like Apple drive hard bargains.
Most striking, in Nuance's supplemental material, is that mobile/consumer organic revenue and profit growth, which includes sales to Apple, is going in the wrong direction. So is margin in that unit.
Remember—Nuance is used by Apple. Google has its own voice platform for Android. Microsoft has its own voice, used in Kinect, etc.
Oh, and when it comes to much of the sizzle in the Nuance story following the iPhone’s use of Siri to answer questions: Nuance is not Siri—Siri is Siri.
A few weeks ago, on air, I even quoted Brian Blair of Wedge Partners, who went to the Consumer Electronics Show expecting to be wowed by Nuance. Instead he came away with a negative biasbecause he saw so many voice solutions in TVs and cars not powered by Nuance.
Bottom line: This is such a classic Wall Street hype job.
In the end the numbers matter.
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