Boom Predicted For Speech-Recognition Software
(04/03/01, 7:50 p.m. ET) By Antone Gonsalves, InformationWeek
The speech-recognition software market is projected to increase more than tenfold over the next four years, driven by the return on investment in making enterprise applications and telecom services available through cellular phones.
Cahners In-Stat Group expects the market to grow from $200 million today to $2.7 billion by 2005. The market research firm says speech-recognition software can save companies money by decreasing the number of people needed to interact with customers or employees by phone.
An example would be a call center.
"The call-center market is just going up and up and up, and it's really a no-brainer for many applications to replace agent functionalities with speech recognition," said Cahners analyst Brian Strachman.
The use of speech recognition will grow fastest among wireless telecom companies and businesses makingtheir intranets voice accessible, he said.
For example, a cellular phone customer or a sales representative could call in and ask that stock and product prices, respectively, be sent to their phone or PDA.
The potential savings of adding efficient delivery of services without adding workers should drive the speech-recognition market, with the greatest revenue going to companies with large subscriber bases, such as AOL Time Warner Inc. (stock: AOL) or Yahoo Inc. (stock: YHOO).
"For any kind of portal, they have to sell it to an existing subscriber base," Strachman said, adding that he believes it would be difficult for a startup to attract enough customers through voice-accessible services.
Speech-recognition software companies such as Nuance Communications Inc. (stock: NUAN), SpeechWorks International Inc. (stock: SPWX), and Lernout and Hauspie have benefited from the availability of greater computer processing power and advancements in the technology.
"Speech recognition has been around for a while, but it's just now starting to work the way it's suppose to," Strachman said. "And I'm talking about telecom-based speech recognition."
Cahners drew its conclusion based on polling vendors and on growth projections for markets that would benefit most by adopting more speech-recognition applications.
