I have seen the future, and it’s right here in my hands. While the rest of you poor suckers will have to wait until October 14 to try Siri on the new iPhone 4S, I’m looking at this magical, revolutionary technology right now. I’m using it to check the weather, book restaurant tables, set reminders, and send tweets—all with the power of my voice.

How did I pull off this stunning journalistic exclusive? By powering up my old iPhone. I’ve had the Siri app installed since the spring of 2010—before Apple even bought the SRI International spinoff for which the app is named.

What short memories most members of the tech media seem to have. After Apple’s event Tuesday introducing the iPhone 4S, a slew of stories hit the Web with headlines like “Apple Debuts Siri” and “Apple Reveals Siri Voice Interface.” The true part, as Apple senior vice president Phil Schiller explained on stage yesterday, is that Apple has taken the added step of baking Siri into its newest iPhone. Just hold down the iPhone 4S home button and you can ask Siri practical questions or assign it basic tasks. (Ask “Will I need an umbrella this weekend?” and it will come back with something like “It doesn’t look like rain is likely this weekend near San Francisco 94107.” Ask it “What’s the melting point of lead?” and it answers with a precise 327.46 degrees Celsius—with a little help from Wolfram Alpha).

But Siri isn’t actually new. It was introduced to the world as a third-party app for the iPhone 3G on February 5, 2010, and had a brief life as the flagship application for the startup of the same name, which won $24 million in funding from Menlo Ventures and Morgenthaler Ventures. Then Apple came into the story, snapping up the company in April 2010 for a reported $150 million to $250 million. The Siri inventors, who mostly hailed from SRI International, disappeared behind the Great Wall of Cupertino.

Apple stayed mum about Siri for the next 18 months—and there were some who feared that the app would go the way of Lala, the cloud music service that Apple bought in December 2009 and shuttered in May 2010. But Apple has long included voice-recognition features in its iOS devices as part of the accessibility options; moreover, it faces stiff competition from Google in the area of voice-driven personal assistant technology. So it was a no-brainer that the company would look for ways to integrate the Siri technology with other iPhone functions, such as e-mail, text-messaging, the music player, maps, reminders, and notifications. And that’s what the new Siri release is about. It’s like the iPhone is getting a new brain. (Watch the Apple video on page 2 of this article for a brief summary.)

While the Siri developers labored behind the scenes to meld the technology into the iPhone 4S, the original Siri app lived in on the iTunes App Store—until yesterday, anyway. It still works great, with some limitations. It’s as much about artificial intelligence—understanding ambiguity and making smart inferences—as it is about voice recognition. But it’s not a Star Trek-style talking encyclopedia—if you venture beyond practical queries relating to your daily activities, it will be at a loss. (When I asked Siri “Can dogs eat chocolate?” it gave me a list of nearby restaurants with “dog” in the title. Surprisingly, there are a dozen of them within a 10-mile radius of my home.)

People like me who’ve already got the app on their phones can keep using it until October 15, according to a notification shared inside the app. After that, the program will be available on the iPhone 4S only.

Why Apple isn’t implementing Siri across all iOS devices as part of the expected October 8 rollout of iOS 5 isn’t clear. Some observers are speculating that Siri is such a CPU hog that it can only run on the more powerful dual-core A5 processor built into the iPhone 4S. But Apple itself hasn’t said this explicitly, and the iPad 2 also has an A5 processor, so by this argument, Siri ought to run just fine on that device.

The more likely explanation is that Apple felt it needed to sex up the iPhone 4S—which isn’t all that different from the iPhone 4, if the truth be told—with some exclusive new features. I’m betting that … Next Page »

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When New York-based website Calorie Count wanted a way to set its app apart from the competition, co-founder and vice president Igor Lebovic literally talked up its latest feature. Calorie Count’s iPhone app uses speech-recognition technology supplied by iSpeech, a startup in Newark, NJ, to help dieters keep track of what they eat.

While demonstrating Calorie Count’s new feature at the NY Tech Meetup on Sept. 6, Lebovic described a meal aloud, and the app counted the calories. He says Calorie Count leveraged iSpeech’s technology to distinguish itself from rivals, who also provide calorie tracking apps and websites. “We believe that voice is a vastly underrated way of interacting with the Internet,” Lebovic says. He believes voice technology will find its way into more Web-based activities such as posting comments or drafting blog entries.

Heath Ahrens, CEO of four-year-old iSpeech, says his company is one of the few independents left in the speech-technology market, and he’s always looking for innovative ways to collaborate with others. Ahrens is out to make his mark in an industry dominated by the likes of giant Nuance Communications in Burlington, MA, which acquired smaller rivals Loquendo in Italy in August and Switzerland’s SVOX in June.

Lebovic says tapping iSpeech’s technology was part of an overall effort to shorten the steps necessary to use the Calorie Count app. Lebovic says counting calories can be work-intensive and finding ways to speed up the process may keep dieters committed to his service. “Whenever we made a feature that … Next Page »

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A new front has been opened in the longstanding legal war between two Massachusetts speech technology powerhouses.

On Thursday, Cambridge, MA-based Vlingo filed a lawsuit in U.S. District Court of Massachusetts charging its much bigger archrival with unfair competition, commercial bribery, breach of contract, and intentional interference with prospective business relationships. Among its chief allegations is that Burlington, MA-based Nuance Communications (NASDAQ: NUAN), out to drive up Vlingo’s costs and force it to agree to an acquisition or technology partnership, filed a baseless patent infringement lawsuit against the smaller company. The complaint also charges Nuance with interfering with Vlingo’s efforts to negotiate deals with AT&T and Nokia, in the latter case by hiring a key Nokia executive who had confidential knowledge of Vlingo’s patent portfolio and patent strategy, and says Nuance CEO Paul Ricci attempted to bribe three key Vlingo executives by offering them $5 million apiece if they could convince their board of directors to sell to Nuance.

“The bottom line is we’ve really got a case against Nuance now for illegal acts in terms of interfering with our business,” said Vlingo CEO Dave Grannan during a phone interview about the lawsuit. “They’ve really tried to destroy or buy our business anyway they can.”

(Disclosure: Xconomy Boston editor Gregory Huang is a brother-in-law of Vlingo co-founder and CTO Michael Phillips. He was not involved in the reporting, writing, or editing of this story and saw no part of it before publication.)

This is just the latest in a string of legal disputes between the two firms. Indeed, Grannan says the companies are now involved in seven open lawsuits—five brought by Nuance, two by Vlingo—covering patent infringement claims on both sides, a false advertising suit brought by Nuance against Vlingo, an investor rights case also lodged by Nuance, and last week’s unfair competition complaint filed against Nuance by Vlingo. (This is all despite the fact that Nuance is an investor in Vlingo, having led the company’s $25 million Series C financing round in October 2009 and contributed $15 million to the round.) The firms have settled one other case, and just last month, a jury in a federal court in Boston determined that Vlingo did not infringe on Nuance’s so-called ’295 patent, ending a suit that was filed by Nuance in June 2008.

The new complaint (click here to view the PDF), filed on the heels of Vlingo’s success in the ’295 patent case, tells a fascinating story of this complicated relationship and the long-running tension between the two speech recognition leaders, which dates back almost to Vlingo’s founding in mid-2006. Keep in mind that it only gives Vlingo’s view of events. In response to my request for comment, Nuance only provided this statement from senior vice president and general counsel Jo-Anne Sinclair: “Nuance strongly believed, and continues to believe today, that Vlingo ran afoul of Nuance patents. We dismiss the recent claims as a distraction from the one principle that matters most—that Vlingo is infringing upon Nuance’s deep, long-standing investments in innovation and intellectual property.”

Long-Spurned Suitor

“Nuance has been aware of Vlingo since Vlingo’s inception as Mobeus, Inc. in June 2006 and, since that time, has coveted Vlingo’s innovative, cutting-edge technology,” last week’s filing asserts. Just a few months after Vlingo’s formation, it says, the company presented prototype products to a Nuance sales representative for evaluation, leading to an invitation from Nuance to take part in its annual users group conference in Orlando. Nuance’s “excitement” about Vlingo at that event, the complaint says, led Ricci to invite Vlingo co-founder Mike Phillips to lunch.

That meeting took place on October 24, 2006, according to the filing, and apparently marked … Next Page »

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A federal jury in Boston found Cambridge, MA-based Vlingo’s speech recognition software did not infringe on a patent owned by Nuance Communications (NASDAQ: NUAN), the companies said in two separate announcements (here and here). Burlington, MA-based Nuance has alleged that Vlingo has infringed on a number of its patents, but this particular patent, 6,766,295, covers the technique for making computerized transcription of a users’ speech more accurate over time using audio samples from multiple sessions. The jury of the Federal District Court in Boston found that Vlingo did not infringe on any of the 30 claims Nuance had alleged in this particular patent case, but it did find that the Nuance patent was valid—Vlingo had claimed it was not.

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Franklin, MA-based Interactions, a speech and customer service technology company, said yesterday it has raised $12 million in new financing led by Sigma Partners. North Hill Ventures, Cross Atlantic Capital Partners, and Updata Partners also participated in the round.

The company says it will use the new money to support its growing customer base, expand its market presence, and invest in new technology. Its goal: to provide something like a “virtual customer service agent” that can engage people in natural conversation.

To that end, Interactions develops automated voice and interactive systems for phone-based customer service. It tries to enhance existing speech recognition and phone-tree technologies by putting some human assistance into the loop, among other things.

The company started in 2004 and has a technology center in Indiana. It is led by CEO Mike Iacobucci.

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For the first time, Google held its annual Americas Faculty Summit in our New York City offices. On July 14th and 15th, about 100 faculty members from universities in the western hemisphere attended the two-day summit, which focused on systems, artificial intelligence, and mobile computing. Google New York is our second largest office outside of our HQ in Mountain View and it employs more than 2,300 employees, about half of whom work in engineering and computer science.

We run this gathering each year to stay on the cutting edge of technology and innovation, and we learn enormously from the vibrant computer science research community in our universities. But, we also want to share with the faculty our experiences, which often relate to doing computer science at planetary scale. (Even we are amazed as to how much processing we do!) This helps the faculty do a better job focusing their research and preparing students. The field of computer science has endless challenges and is still sufficiently young that progress will continue to accelerate—and that’s good for our users, our industry, and our company. Of course, we also want to maintain Google’s reputation for quirkiness, irreverence, and passionate excellence, so that we can attract and hire the next generation of computer scientists.

While it’s difficult to cover all the topics at a two day event, I’ll provide some highlights. Johan Schalkwyk, one of our top speech scientists in New York, described some of the fascinating challenges related to implementing speech recognition on mobile phones. One goal, for example, is to get a device to execute any … Next Page »

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[Corrected 7/19/11, 5:45 pm. See below.] Last month, Beverly, MA-based Eliza took in its first-ever outside investment, with an undisclosed equity financing from Parthenon Capital Partners, a private equity firm with offices in Boston and San Francisco.

Founded in 1999, Eliza offers speech recognition technology that powers automated phone calls to patients on behalf of accountable care organizations, employers, and hospitals, to cull qualitative information on patient health and offer actionable steps for improving wellness. [An earlier version of this paragraph incorrectly stated Eliza was founded in 2002. We regret the error.]

This whole time Eliza has been keeping a low profile and bootstrapping as it built out its technology to serve more customers, in the meantime accruing data from more than 450 million interactions with patients, says Eliza co-founder and president Alexandra Drane.

Things have started to heat up in the last couple of years surrounding national health reform, Drane told me when I caught up on the phone with her and fellow co-founder and CEO Lucas Merrow last week. “We started to consider a financial partner to help the organization go through opportunities for inorganic growth,” Drane says. “There may be an opportunity for us to think differently, more aggressively, in more intense ways in some areas.”

Eliza still has every intention of focusing on healthcare, but it’s looking to use the financing to build out new capabilities based on needs that have been revealed from the data in patient calls. The Eliza technology is designed to help patients tackle things like diabetes and high blood pressure that are already classified as health problems, but other issues that aren’t as concretely defined have come up in loads of calls with patients, Drane says. Patients talk to the system about issues like caring for elderly parents or financial stress, for example, that have interfered with patients’ ability to care for themselves properly, Drane says.

“Our hypothesis is understanding, A, how to establish a relationship with somebody to help them to understand issues, and B, that these issues in and of themselves have health consequences,” she says. “That is a big focuse for us right now at Eliza. It all relates to having the most accurate pictures of who people are and what they care about.”

Eliza could potentially be eyeing other acquisitions in the healthcare sector, as well as increasing its headcount, which is now at about 170 people, Merrow says. “We already planned on doing some pretty strong hiring prior to the investment. As part of this we’ll be beefing up,” he says.

Ultimately, the company hopes to get its technology in the hands of many more firms focusing on healthcare. Things are just beginning on this front, both Drane and Merrow say.

“A lot of customers don’t use this technology yet,” Merrow says. “It’s still an early lifecycle for what we do. We definitely needed expertise and capital to help us address that.”

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Beverly, MA-based Eliza, a developer of speech recognition technology for communicating healthcare information to patients, has taken in a growth investment from Parthenon Capital Partners, a Boston- and San Francisco-based private equity firm. The total of the investment was not disclosed, but it marks the first time Eliza has received institutional funding since founding in 2002. The company said that the money will go to providing partial liquidity to certain shareholders and to funding future growth initiatives. Eliza founders and senior management will still own a majority of the company.

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The patent litigation between Burlington, MA-based Nuance Communications (NASDAQ: NUAN) and Cambridge, MA-based Vlingo is nothing new.

A false advertising lawsuit is, though. Earlier this week, Nuance filed such a lawsuit against Vlingo in Suffolk County Superior Court. The suit asserts that Vlingo, on its website and elsewhere, “makes numerous false and misleading representations of fact to induce consumers to purchase or use Vlingo products and services,” according to court documents provided to Xconomy by Vlingo.

[Disclosure: the brother-in-law of Xconomy Boston editor Greg Huang is a co-founder of Vlingo. Mr. Huang was not involved in the planning, directing, reporting, or editing of this story.]

These allegedly false and misleading claims include the statement that Vlingo’s technology achieves unprecedented accuracy, that it applies “automatic adaptation” to pronunciation and vocabulary, that it learns for example, “over time that a particular user tends to ask for Mexican food,” and that the adaptation process is “new technology.” Nuance calls these claims unfair and deceptive—for instance, at one point the suit says “Vlingo claims that certain technology is ‘new’ when in fact it is not”—and has sought unspecified monetary damages for the harm Vlingo has caused it as a result. Nuance also states that the claims “harm the consuming public and are contrary to the public interest.”

A representative from Nuance said that the company does not comment on matters of litigation.

Here is the PDF of Nuance’s false advertising complaint against Vlingo and supporting documents.

Nuance says in its suit that it became aware of the false advertising as part of the discovery process—specifically when it deposed key Vlingo employees—in one of the pending patent infringement cases. Nuance says a protective order issued in that case prevents it from using at least some of the information in the new false advertising suit at this time, but that it is seeking ways to do so.

“To me it looks like a real sign of desperation,” Vlingo CEO Dave Grannan told me on a call Thursday. “It’s just a measure of the fact that they’re trying to increase our legal expenses and create some sense of uncertainty and doubt against our customer base.

“It’s continued to be part of the Nuance strategy to compete in the courtroom rather than in the market,” he says.

Vlingo offers a mobile app that consumers can buy themselves and also powers voice recognition features for device makers like Samsung. Grannan says his company has recently inked some big customer deals —which he didn’t name—in which it went head to head with Nuance. “Every time we have a market victory, they sue us again,” he says.

The false advertising lawsuit is the latest step in the three-year legal wranglings between the two software companies. Earlier this month, Nuance hit Vlingo with … Next Page »

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[Updated 6/17/11 with terms. See below] Some big news in the world of speech software today. Burlington, MA-based Nuance Communications (NASDAQ: NUAN) is acquiring Zurich-based embedded speech software firm SVOX, Xconomy has learned from a source with knowledge of the deal. The acquisition price wasn’t disclosed, but is said to be in the triple-digit millions of dollars.

[Update] Nuance filed a Form 8-K with the SEC on Friday, which reveals the aggregate price was 87 million Euros (about U.S. $125 million)—57 million Euros in cash upfront, 8.3 million in cash or stock after one year, and 21.7 million in cash or stock by the end of 2012.

The deal seems to make sense for Nuance, which is trying to dominate the fields of speech, imaging, and communications technologies—especially speech.

SVOX, a profitable private company founded in 2000, develops speech interfaces for the automotive, mobile, and consumer electronics industries.

Nuance has an aggressive (and controversial) reputation when it comes to acquisitions of speech technology companies, as this recent Bloomberg BusinessWeek article details. The company has made a number of acquisitions in the Seattle area and has a sizable presence there—which is the subject of a separate story.

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As someone who served on the boards of Siri and Nuance—two companies whose technologies are rumored to be deeply integrated into Apple’s upcoming iOS 5—I might have a unique take on what’s possible at the upcoming Apple World Wide Developer Conference (WWDC ) in San Francisco June 6-10. I throw my speculations into the ring with so many others, informed not by any privileged knowledge (the product team is appropriately tight-lipped), but by my long-time involvement with speech recognition and artificial intelligence (AI). With Siri and Nuance, Apple can leapfrog Google’s Android in the short-term. Or, they can do something “Apple-esque” and fundamentally change the rules of the game and reclaim leadership for good.

From a standing start three years ago, Android has managed to overtake iOS as the leading smartphone platform. Today, Google has 35 percent (versus Apple’s 26 percent) of the U.S. smartphone market, according to a comScore report for April 2011. How Apple uses Siri and Nuance in their next move will have important repercussions for the company as well as the developer, technology, and user communities worldwide.

What’s Rumored

Of all the rumors coming out of the rumor mill, the following is most pertinent for this conversation: It is widely reported that Apple is working on a licensing agreement with Nuance to embed speech recognition capabilities deeply into iOS 5. It is also speculated that Siri, a natural language AI technology acquired by Apple in April 2010, will figure prominently in iOS 5. In addition, Apple may be working on a “world phone” or “iPhone 4S or 5″ which would be compatible with both GSM and CDMA—which means it would work on almost all of the world’s cellular networks.

What’s Possible

If these rumors are true, Apple is in an advantageous position. But it remains to be seen have far they will push their advantage. For example, Apple can either integrate Nuance and Siri a little—or a lot. I say, go big. Don’t use the incredible power of these two best-in-class technologies to manage Apple-only applications. Sure, it would be fun to say, “Open iTunes. Play Born this Way by Lady Gaga,” instead of typing it out. But it would be far more transformative to open up the API to allow all of Apple’s 100,000-plus registered developers to dream up ways to use voice recognition and natural language AI in their own third-party apps.

Die-hard Apple fans fear a repeat of history in which Apple chooses to control innovation. That didn’t work out so well for Apple back in the 1980s and 1990s when Microsoft ate their lunch by opening their hardware platform and encouraging a proliferation and domination of Windows-compatible systems. I don’t believe that will happen again; but it is possible.

A quick primer on what Nuance and Siri can do will shed light on why I am so fascinated by their achievements. Both born out of the prestigious SRI International technology R&D center in Menlo Park, CA, they serve different parts of the spectrum in which your verbal intent is translated into action.

For example, you say, “Book me a table for two at Il Fornaio in Palo Alto at 6 p.m. tonight.”

Nuance would perform speech recognition and parse out every sound in that phrase. It would map sounds into syllables and syllables into words. This is a non-trivial task and … Next Page »

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Cambridge, MA-based Vlingo came out of stealth mode in 2007 with technology that enabled users to search and call businesses from their mobile phones, and ultimately sought to give users the power to use their voice for the mobile functions that previously required a keyboard.

But now it’s looking to go far beyond that, to turn the phone into a tool that can help users better complete tasks in the physical world, and to turn its app into a navigator for the troves of content that most phones hold. This year, Vlingo is working on making money off of the answers that its app helps turn up, and also diving deeper into the actions it assists users in completing.

On top of speech-recognition technology, Vlingo has layered what it calls an “intent engine” that extracts “what you mean and what you’re trying to do,” says Vlingo vice president of marketing Hadley Harris. It then translates that into an app that allows users to talk to their phones like they would a person (say, a personal assistant), and ti do things like text a co-worker, look up the a movie, make a dinner reservation, or even search and book hotels. (The latter three functions are possible thanks to recently announced integrations with Kayak, Fandango, and OpenTable.)

There are plenty of mobile apps already on the market, each focused on different functions, but Vlingo aims to cut through the clutter of those that users already have downloaded on their phones. In December it released an updated version of its Virtual Assistant App, which features an “ActionBar” that lives on a phone’s desktop, and that users can talk or type into, connecting them with the appropriate app that matches their desired function. The newest feature is available on Android, which Vlingo considers its “innovation platform,” but will be rolled out to the other operating systems it serves, including iPhone and Blackberry, says Harris.

“We feel this Virtual Assistant is the new way people will interact with the Internet,” he says.

He gave me a demonstration last week of the technology, which responded to voice command much more like a person than a machine. For example, you don’t have to just tell your phone to text a friend, but can say, “tell John Doe I’m running late,” and it knows to pull up the text function and type out that message. It also looks to mobile search engines when asked a question about tomorrow’s weather, or will display check-in results on Foursquare when asked something like “where are my friends?”

“We’re really trying to push that natural conversation user interface,” Harris says.

This year Vlingo is looking to dive deeper with the functions that Virtual Assistant can perform, on both the social and professional side, Harris says. For now, it allows users to update their statuses on Facebook. But the company intends to add … Next Page »

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I learned at least three things over coffee last week with Nathaniel Borenstein, one of the fathers of modern e-mail systems. Sadly, none of them keep me from wanting to set fire to my inbox, which surpassed 30,000 unread messages this weekend.

Borenstein is chief scientist at Mimecast, a U.K.-based e-mail management firm with a strong presence in Boston. He is based in Michigan and has some roots there, as a former faculty member at University of Michigan and a founder of NetPOS, an e-commerce firm in Ann Arbor, MI. He is also a deep thinker on technology and society who isn’t afraid to speak his mind, so I kept my notebook open and ready as we talked about current trends in tech and business.

Here are my three takeaways, from specific to general:

1. Voltage Coffee & Art, the new startup hangout spot near Kendall Square, doesn’t strike out-of-towners like Borenstein as a very inviting place for meetings. It’s not particularly cozy or private, especially for a cafe. (Truth be told, I don’t love its coffee either, but that’s what a couple years in snobby Seattle will do to you.) But it’s still a good place to get work done or have a non-private meeting—and definitely a nice gathering spot for entrepreneurs.

2. The spam wars continue, albeit more quietly. It seems like all the talk about “spam killing the Internet” peaked about five or six years ago. And, despite my inbox woes—some messages are spam I haven’t deleted yet—I feel like spam isn’t the problem it once was. Not so, says Borenstein. We’ve just reached “homeostasis,” he says, whereby more people work on combating spam when it gets bad, but when they ease up, spammers swoop in and try new things. Borenstein thinks micropayments—a clever way to make spammers pay for sending messages—might be the most effective solution (though micropayments in general still face an uphill climb because banks don’t like the idea, he says). “We’ve barely scratched the surface of countermeasures,” he says. “It makes me think the Internet is not complete.”

3. Timing is everything, especially in the business of technology. This is a well-worn truth, but as the latest examples, Borenstein points to speech recognition (especially on mobile phones), tablet computing (iPad and all its soon-to-be competitors), and the sector du jour, group buying. Each of these is an old idea whose time has come. In particular, daily-deal sites like Groupon are “driven by a good idea that’s not primarily technology,” he says. “That’s also why it’s sustainable.” What’s more, Borenstein predicts there will be more than one or two winners in the sector. “It could be a market with a lot of chimps and no gorilla,” he says.

Lastly, we talked about a darker side of technology that’s been getting a lot of attention lately: the impact of the Web on humankind’s ability to think deeply. Borenstein penned a blog post last week called “The Internet is turning you into a high-tech lab rat.” The title, which references Nicholas Carr’s The Shallows, pretty much says it all. The idea is that dealing with constant e-mails, tweets, blogs, social networks, and addictive games is overloading people’s brains and degrading their ability to think about important things. (This also ties into what my colleague Wade calls “on demand disorder.”)

Borenstein doesn’t totally buy the argument, but he is taking some steps to combat distractions—by doing things like delaying all but his most important incoming and outgoing e-mails. (That reminded me of Baydin, the e-mail tech startup that recently moved from Boston to Silicon Valley, as was first reported by my colleague Erin.)

But perhaps it is telling that several of Borenstein’s friends and colleagues who were Internet pioneers “have become disillusioned and headed for the hills,” he says. Indeed, many who were involved in the early days of the Web, he says, “now think it was a bad idea.”

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It’s a staple of every film depiction of killer androids since Terminator: the moment when the audience watches through the robot’s eyes as it scans a human face, compares the person to a photo stored in its memory, and targets its unlucky victim for elimination.

That’s computer vision in action—but it’s actually one of the easiest examples, from a computational point of view. It’s a simple case of testing whether an acquired image matches a stored one. What if the android doesn’t know whether its target is a human or an animal or a rock, and it has to compare everything it sees against the whole universe of digital images? That’s the more general problem in computer vision, and it’s very, very hard.

But just as we saw with the case of statistical machine translation in Part 2 of this series, real computer science is catching up with, and in some cases outpacing, science fiction. And here, again, Google’s software engineers are helping push to the boundaries of what’s possible. Google made its name helping people find textual data on the Web, and it makes nearly all of its money selling text-based ads. But the company also has a deep interest in programming machines to comprehend the visual world—not so that they can terminate people more easily (not until Skynet takes over, anyway) but so that they can supply us with more information about all the unidentified or under-described objects we come across in our daily lives.

I’ve already described how Google’s speech recognition tools help you initiate searches by speaking to your smartphone rather than pecking away at its tiny keyboard. With Google Goggles, a visual search tool that debuted on Android mobile phones in December 2009 and on the Apple iPhone in October 2010, your phone’s built-in camera becomes the input channel, and the images you capture become the search queries. For limited categories of things—bar codes, text on signs or restaurant menus, book covers, famous paintings, wine labels, company logos—Goggles already works extremely well. And Google’s computer vision team is training its software to recognize many more types of things. In the near future, according to Hartmut Neven, the company’s technical lead manager for image recognition, Goggles might be able to tell a maple leaf from an oak leaf, or look at a chess board and suggest your next move.

Goggles is the most experimental, and the most audacious, of the technologies that Google CEO Eric Schmidt described in a recent speech in Berlin as the harbingers of an age of “augmented humanity.” Even more than the company’s speech recognition or machine translation tools, the software that Neven’s team is building—which is naturally tailored for smartphones and other sensor-laden mobile platforms—points toward a future where Google may be at hand to mediate nearly every instance of human curiosity.

“It is indeed not many years out where you can have this little bird looking over your shoulder, interpreting the scenes that you are seeing and pretty much for every piece in the scene—art, buildings, the people around you,” Neven told me in an interview late last year. “You can see that we will soon approach the point where the artificial system knows much more about what you are looking at than you know yourself.”

Going Universal

Neven, like most of the polymaths at Google, started out studying subjects completely unrelated to search. In his case, it was classical physics, followed by a stint in theoretical neurobiology, where he applied methods from statistical physics to understanding how the brain makes sense of information from the nervous system.

“One of most fascinating objects of study in nature is the human brain, understanding how we learn, how we perceive,” Neven says. “Conscious experience is one of the big riddles in science. I am less and less optimistic that we will ever solve them—they’re probably not even … Next Page »

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“Real” 4G Mobile broadband. Verizon recently launched its 4G LTE network (via laptop modem cards). The Verizon network speed dwarfs the “4G” networks being advertised by Sprint and T-Mobile. Verizon’s 4G will be users’ first taste of true mobile broadband and will further drive mobile data usage and the percentage of time users spend on the mobile Internet. The first 4G LTE handsets will be introduced mid-year and will be lighting fast compared to 3G models. Verizon’s 4G deployment combined with its rumored access to the iPhone market will place substantial pressure on AT&T to accelerate its 4G rollout with exciting new (likely Android-based) handsets.

Speech recognition. Voice input into mobile devices will start to become more mainstream. Companies like Audience are enabling the reduction of background noise on handsets, driving much greater speech recognition accuracy. At the same time, the Android platform has legions of end users effectively “training” Google’s speech recognition engines (in multiple languages) via Google’s voice search. Speech recognition quality will get better and better and voice input will start to feel more intuitive and efficient compared to touch screen typing

Solar industry progress. After a two-year drought of capital access and valuations challenges, a number of solar start-ups will have weathered the storm and start to show real progress on commercial deployments, manufacturing capacity and competitive costs per kilowatt hour. While it is unlikely this sector will be positioned to see new IPOs, a few early winners will emerge and bring new investor enthusiasm to the sector.

“See what I see”. Apple’s Facetime technology will expand its footprint and be enabled across multiple devices and beyond just WiFi. While video conversations will be common, the more mainstream use will be providing a video window to another person to “see what I see”- e.g., a concert, a document, a product, a meeting, etc. These video interactions will start to become commonplace.

Biotech M&A. Biotech sector deal making should heat up as the large pharma companies face increasing pressure to fill their R&D pipelines and mitigate the impact of drugs going off patent. While the IPO market for biotech may remain lukewarm, there should be more and more big deal making for attractive clinical programs as well as acquisitions by the large players.

[Editor's Note: This is part of a series of posts from Xconomists and other technology and life sciences leaders from around the U.S. who are weighing in with the top surprises they've seen in their respective fields in the past year, or the major things to watch for in 2011.]

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Editor’s Note: This is Part 1 of a three-part story that we originally published on January 3, 5, and 6, 2011. We’re highlighting it today because the series was just named by Longform.org as one of its top technology stories of 2011.

Already, it’s hard for anyone with a computer to get through a day without encountering Google, whether that means doing a traditional Web search, visiting your Gmail inbox, calling up a Google map, or just noticing an ad served up by Google Adsense. And as time goes on, it’s going to get a lot harder.

That’s in part because the Mountain View, CA-based search and advertising giant has spent years building and acquiring technologies that extend its understanding beyond Web pages to other genres of information. I’m not just talking about the obvious, high-profile Google product areas such as browsers and operating systems (Chrome, Android), video (YouTube and the nascent Google TV), books (Google Book Search, Google eBooks), maps (Google Maps and Google Earth), images (Google Images, Picasa, Picnik), and cloud utilities (Google Docs). One layer below all of that, Google has also been pouring resources into fundamental technologies that make meaning more machine-tractable—including software that recognizes human speech, translates written text from one language to another, and identifies objects in images. Taken together, these new capabilities promise to make all of Google’s other products more powerful.

The other reason Google will become harder to avoid is that many of the company’s newest capabilities are now being introduced and perfected first on mobile devices rather than the desktop Web. Already, our mobile gadgets are usually closest at hand when we need to find something out. And their ubiquity will only increase: it’s believed that 2011 will be the year when sales of smartphones and tablet devices finally surpass sales of PCs, with many of those new devices running Android.

That means you’ll be able to tap Google’s services in many more situations, from the streets of a foreign city, where Google might keep you oriented and feed you a stream of factoids about the surrounding landmarks, to the restaurant you pick for lunch, where your phone might translate your menu (or even your waiter’s remarks) into English.

Google CEO Eric Schmidt says the company has adopted a “mobile first” strategy. And indeed, many Googlers seem to think of mobile devices and the cameras, microphones, touchscreens, and sensors they carry as extensions of our own awareness. “We like to say a phone has eyes, ears, skin, and a sense of location,” says Katie Watson, head of Google’s communications team for mobile technologies. “It’s always with you in your pocket or purse. It’s next to you when you’re sleeping. We really want to leverage that.”

This is no small vision, no tactical marketing ploy—it’s becoming a key part of Google’s picture of the future. In a speech last September at the IFA consumer electronics fair in Berlin, Schmidt talked about “the age of augmented humanity,” a time when computers remember things for us, when they save us from getting lost, lonely, or bored, and when “you really do have all the world’s information at your fingertips in any language”—finally fulfilling Bill Gates’ famous 1990 forecast. This future, Schmidt says, will soon be accessible to everyone who can afford a smartphone—one billion people now, and as many as four billion by 2020, in his view.

It’s not that phones themselves are all that powerful, at least compared to laptop or desktop machines. But more and more of them are backed up by broadband networks that, in turn, connect to massively distributed computing clouds (some of which, of course, are operated by Google). “It’s like having a supercomputer in your pocket,” Schmidt said in Berlin. “When we do … Next Page »

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[Updated, see below] Proving that he has the power to move markets with an odd aside, Apple co-founder Steve Wozniak sparked rumors this week that Apple is buying Nuance Communications (NASDAQ: NUAN), the giant Burlington, MA-based maker of speech recognition software.

The source of the speculation is a passing remark in a video interview about the future of the Apple iPhone between Wozniak and TVDeck.com founder Romil Patel (see below, at about the 0:45 mark). “I think voice recognition is going to become more and more a big part of these machines,” Wozniak says in the video. “Apple is probably thinking the same way. They recently bought the company Nuance, that does a lot of really great voice recognition for that program I just described, Siri Assistant.”

That was enough to set off the blog 9to5Mac headline “Whoa! Did Apple buy Voice Recognition company Nuance?,” a meme which quickly spread to mocoNews, MobileBeat, and TechCrunch.

Neither Nuance nor Apple have issued official statements about the rumors, and Nuance makes no mention of acquisition discussions with Apple in its quarterly report, issued yesterday. However, Mass High Tech is reporting today that it received e-mail from Nuance spokesman Richard Mack calling Wozniak’s statement “speculation.”

Several commentators conclude that Wozniak’s remark is a misstatement born of confusion over the Siri iPhone app, a voice-driven personal assistant that can make restaurant reservations, book concert tickets, look up weather forecasts, and the like. Apple did acquire Siri, the maker of app, in April 2010. And the voice recognition software used in the app is licensed from Nuance.

Nuance is valued at about $5.3 billion, so Apple, which has more than $51 billion in the bank, could easily afford to snap up the company if it wanted to. But such an acquisition would be unusual for Apple, particularly given that Nuance’s speech recognition products are in such widespread use within businesses and on Windows computers, markets that Apple has traditionally shunned.

Nuance shares were up as much as 12 percent on the rumors today, the stock’s largest intraday gain since April 2009, according to Bloomberg News. As this article went to press, Nuance was trading at $18.16, up about 6 percent.

Update, 6:25 pm PST 11/23/10: Reuters is reporting that Wozniak has acknowledged that he misspoke. “I thought I’d read about it but obviously got it all wrong,” Wozniak told the news service in an e-mail.

Here’s the video that started the whole hullabaloo:

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Acquisitions were a big theme in the New England-area deal news this past week. We also saw several funding rounds and an intellectual property deal.

—Providence, RI-based Alektrona, a maker of smart-grid software and hardware, grabbed $250,000 in funding from the Slater Technology Fund, also of Providence. The money comes as part of a $510,000 seed funding round, which also included backing from NStar’s former chief information officer, Gene Zimon.

—Cara Therapeutics, a developer of treatments for pain and inflammation, raised $15 million in a Series D funding led by Rho Ventures. Alta Biopharma, Ascent Biomedical Ventures, CT Innovations, Devon Park BioVentures, Healthcare Private Equity, Mitsubishi International, and MVM Life Science Partners also participated in the financing for Shelton, CT-based Cara, which has now raised a total of around $43 million.

—Boston-based Gazelle, a website that facilitates the selling and recycling of used electronics, raised $12 million in a Series C funding round led by Physic Ventures. The financing also included Gazelle’s existing investors, Venrock Associates and RockPort Capital Partners. Gazelle says it will put the money toward scaling its businesses to meet new customer demand.

—Acton, MA-based Mintera, an optical-switch maker, was acquired by Oclaro, a San Jose, CA-based optical communications and laser technology firm, for $12 million in cash upfront. The deal could total $32 million if Mintera brings in revenues of $70 million over the next year and a half. Its revenue for the most recent fiscal year was in the neighborhood of $20 million.

—Euthymics Bioscience, a Cambridge, MA-based startup working on depression treatments that lack the side effects of many existing drugs, said it pulled in the first tranche of its Series A funding round, led by Novartis Venture Funds and Venture Investors. The financing could total … Next Page »

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Vlingo, a Cambridge, MA-based provider of voice-to-text software, has taken a defensive move to help protect it against a lawsuit filed by speech software giant Nuance Communications, announcing a deal today with Intellectual Ventures that adds a slew of intellectual property to its arsenal.

Vlingo has purchased several patents from Bellevue, WA-based Intellectual Ventures that Nuance would need to license to continue shipping its products, Vlingo president & CEO Dave Grannan told me in a phone interview. Vlingo filed a lawsuit against Nuance last week regarding infringement over those particular patents, Grannan says. Additionally, Vlingo has enlisted in a program in which it gets non-exclusive rights to Intellectual Ventures’ portfolio of patents.

“By acquiring patents from Intellectual Ventures, we can even the playing field,” Grannan says.

Vlingo’s hope is that Nuance, which is suing the software startup for patent infringement, would be willing to drop the suit in exchange for a business settlement with the company, Grannan says. In such a settlement, each company would get access to the other’s patents. Grannan called that type of deal “a bit of a horse trade,” and said it would be more productive for both businesses than the litigation.

In June of 2008, Burlington, MA-based Nuance (NASDAQ: NUAN) alleged Vlingo had violated U.S. Patent No. 6,766,295, issued to Nuance engineers, which protects a technology for making voice-to-text software more accurate by sampling multiple audio clips, such as phone sessions. Nuance sought monetary damages and to prevent Vlingo from making, using, and selling the software.

“A lawsuit is a waste,” Grannan says. “It takes time and effort away from both of our companies to make good products.” He says the deal with Intellectual Ventures protects Vlingo as it continues to pursue its own patents, a process that can take four to six years. Vlingo has filed more than 30 patent applications, he says. “We’re very intent on getting our own patents awarded, that just takes time.”

A Nuance victory in the lawsuit could shut down Vlingo’s partnership deal with Yahoo, through which it powers the Internet giant’s oneSearch mobile search engine with its speech recognition technology. The deal was announced just two months before the Nuance lawsuit surfaced.

When news of the lawsuit first hit, Grannan told Wade that the lawsuit was Nuance’s response to not scoring the deal with Yahoo. Grannan reiterated … Next Page »

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Memo to mobile-interface companies: Nuance is on the prowl.

The speech-recognition and imaging software giant (NASDAQ: NUAN), based in Burlington, MA, has acquired ShapeWriter, a Silicon Valley-based spinout from the IBM Almaden Research Center, for an undisclosed sum. Nuance has not spoken publicly about the acquisition, but a message on the ShapeWriter website as of yesterday reads, “ShapeWriter, Inc. is now part of Nuance. The ShapeWriter continuous touch application has joined Nuance’s portfolio of patented text input solutions recognized as the industry’s leading predictive text technology.” E-mail messages sent to Nuance’s media representatives this morning were returned, but the company hasn’t commented on the deal yet.

The deal is interesting on a few fronts. First of all, the technology in question—which lets you type on a touchscreen keyboard by sliding your finger to connect letters, instead of tapping them individually—is starting to take off. The key is that the software is predictive, so you can be sloppy and it will still get the words right most of the time. The big makers of mobile phones and operating systems are clamoring to offer consumers better ways of inputting text on touchscreens, so this technology seems to fit the bill. But given how similar the offerings look (at first glance) from tech companies like Nuance, ShapeWriter, Dasur, SlideIT, and Swype, I sense some patent battles and consolidation coming on.

Which brings us to interesting point No. 2. Seattle-based Swype is an early leader in the field, and a direct competitor to ShapeWriter and Nuance. Swype has venture backing from Samsung Ventures, Nokia Growth Partners, and Docomo Capital, and has been inking deals left and right with original equipment manufacturers and wireless carriers to put Swype’s software on mobile devices. Knowing the guys at Swype, they are probably following the Nuance news with great interest, but won’t comment on it. (Though they have been getting lots of national media interest lately.)

Swype was founded in 2002 by Cliff Kushler and Randy Marsden, and is now led by CEO Mike McSherry. Kushler is the co-inventor of T9, the predictive texting technology that is used in some 4 billion devices worldwide. Guess who owns T9? That’s right, Nuance.

Over the past few years, Nuance has pursued an aggressive strategy of acquisitions in computer interfaces and speech. [Full disclosure: My brother-in-law is a former employee of Nuance who now works at Vlingo, a Cambridge, MA-based company that competes with Nuance in speech recognition---GH.] Nuance has also developed plenty of its own technologies. Back in March, the company introduced T9 Trace, its version of predictive, slide-y, touchscreen text-input software. Presumably, ShapeWriter adds a new dimension to the technology, but we’ll see where all of this goes.

I haven’t even mentioned Apple yet, but clearly Steve Jobs and Co. are watching this stuff closely. According to the New York Times, Swype doesn’t have a deal with Jobs just yet, but “is tinkering with software for the iPhone and the iPad and hopes to show it to Apple soon.”

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