Speech Recognition Market Talking to Dollars in 2001 and Beyond

Despite an economic climate that was particularly damaging to new technologies and the financial difficulties of Lernout and Hauspie, one of the leading providers of the technology, the US speech recognition market continued to grow in 2001, according to In-Stat/MDR.

The high-tech market research firm reports that, while not the watershed year of 2000, the market, as a whole, continued to embrace speech recognition products in 2001 as a means of lowering costs, providing greater customer service, and launching new, innovative, products.

During the year, market leaders such as Speechworks, IBM and Philips Speech increased penetration, while the previous market leader, Nuance, experienced a 24 percent decrease in revenues.

"We are just on the cusp of a speech recognition revolution," says Brian Strachman, a senior analyst with In-Stat/MDR. "Carriers are only now adopting the products, the technology has just reached the point of combustion, and standards such as Voice eXtensible Markup Language (VXML) and Speech Application Language Tags (SALT) are poised to change the velocity of the market. Given these factors, speech recognition will find its way to the mainstream and very soon we will be using it in our homes."

In-Stat/MDR believes that the following will contribute to the continued growth in adoption and pervasiveness of speech recognition:

• The use of standards such as VXML and SALT, which will open up vast new markets and opportunities.
• Continuing increases in processor speeds that will allow for greater speech recognition vocabulary size and accuracy.
• The importance of measuring Return on Investment (ROI) in a tight economy, and voice recognition's ability to adequately demonstrate it.
• Significant advances in development tools and the resulting increase in production speed and lower costs.
• Carrier demand for churn reduction and greater customer revenue.
• An increase in the number of wireless subscribers.
• Increased regulation of the use of wireless handsets while operating a car.