Nuance to Buy Swype for $100M USD, Form Unholy Input Alliance

Swype and T9: new BFFs  (Source: Swype (left); Android Guys (right))

The company that brought you Siri, Ford Sync, and T9 adds another tool to its portfolio

Nuance Communications, Inc. (NUAN) is a juggernaut in the field of input technologies.  It produces some of the best voice recognition software around, in the form of its Dragon speech-to-text software.  The company's voice recognition technology has been applied to power diverse systems outside the PC, as well, including Ford Motor Company's (F) Sync,Ford's MyFord Touch, and Apple, Inc.'s (AAPL)Siri app.  And Nuance's T9 phone keyboard input technology is still one of the most used input methods in smartphones and feature phones.

By comparison Swype, Inc. is a more humble input startup, focusing solely on touch-keyboard technologies.  It was co-founded by Randy Marsden, developer of the onscreen keyboard found in recent versions of Microsoft Corp.'s (MSFT) Windows operating system, and Cliff Kushler, co-inventor of T9.

Now Kushler's startup has been folded into current T9 owner Nuance's portfolio, thanks to a $100M USD acquisition.

Nuance and Swype have both confirmed the deal.

With the acquisition Nuance approaches a monopoly on mobile input technology, though there's still a few cheeky mobile input startups out there.  Google Inc. (GOOG), Microsoft, Apple, and Research in Motion, Ltd. (TSE:RIM) all have one thing in common in the mobile market -- they all rely heavily on T9 and/or Swype for fast input.

While the move may mean less competition, it also opens the door to some exciting possibilities that would not previously have been possible due to the potential for litigation between Swype and Nuance.  For example, Nuance could now attempt to create a Swype-style implementation of T9, for faster typing on compact touch screens or narrow screen modes (i.e. portrait mode).

Mr. Kushler and Mr. Mardsen hardly seem the type to rest on their laurels.  It should be interesting what kinds of input they dream up next.  Our guess is that there's more startups in store for the Swype co-founder, once they finish helping their company transition to its new role as a Nuance unit.