Apple's (AAPL) Alleged Buyout of Voysis to Boost Voice Search

Apple AAPL has acquired Dublin, Ireland-based AI-startup Voysis, per a Bloomberg blog. Voysis’ natural language processing (NLP) platform helps virtual assistants like Siri to better understand voice commands from users.

Voysis’ NLP platform is based on WaveNet technology, developed by Alphabet GOOGL division Google’s DeepMind program in 2016. The company is primarily focused on selling its solution to retailers including e-commerce service providers. Voice-based shopping is expected to jump to $40 billion in 2022.

The deal is likely to help Apple improve capabilities of Siri and gain some ground in the voice assistant space, currently dominated by the likes of Amazon’s AMZN Alexa and Google assistant. Notably, voice assistants are chiefly used in smart speakers and smartphones.

Per a recent eMarketer report, solid adoption of Alexa-supported Echo devices is expected to help Amazon maintain its supremacy in the U.S. smart speaker market during 2020. Google, which trails Amazon in the United States, has an edge in international markets, courtesy of better language support. Moreover, it leads  the smartphone market on the back of android.

Apple Infuses AI to Strengthen Portfolio

Apple’s acquisitions are focused on infusing AI and machine learning in its solutions and devices. Per a CBInsights report, since 2010, Apple acquired 20 AI-related companies, ahead of 14 purchased by Google and 10 bought by Microsoft MSFT.

Apple Inc. Price and Consensus

Apple Inc. price-consensus-chart | Apple Inc. Quote

Notably, in Jan 2020, Apple bought Xnor.ai, a Seattle-based AI startup, which specializes in low-power, edge-based tools that allow AI to operate on devices like smartphones, cameras and drones rather than in the cloud.

Xnor.ai's technology will assist Apple to continue promoting data privacy on the iPhone. With the newly-purchased technology, Apple is likely to better secure data generated by the use of AI applications on the iPhone and off the cloud. (Read More: Apple Reportedly Acquires Xnor.ai to Boost On-Device AI)

Apart from utilizing Voyasis technology to enhance Siri’s capabilities, Apple is expected to open up its NLP platform to developers. The company’s App Store continues to grab attention of prominent developers from around the world, helping it offer attractive new apps to perk up traffic.

Service Portfolio to Spur Growth as iPhone Sales Tumble

Apple’s Services portfolio that includes revenues from cloud services, such as App store, Apple Music, AppleCare, Apple Pay, and licensing and other services now became its cash cow.

Apple currently has more than 480 million paid subscribers across its Services portfolio. In first-quarter fiscal 2020, this Zacks Rank #3 (Hold) stock witnessed double-digit growth in services across all geographic segments. Robust performance of cloud services, music, payment services and the App Store search ad business drove Services revenues. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Services portfolio is expected to boost Apple’s prospects in the near term as iPhone sales are likely to remain relentlessly weak due to the coronavirus outbreak.

Moreover, the coronavirus pandemic that originated in China understandably dimmed iPhone’s demand. While factories in the country resumed business activities, Apple is facing weakening demand as the nations across the world implement social distancing norm.

Apple is now expected to defer the launch of its first 5G-supported iPhone device. The delay can be attributed to supply-chain constraints as well as anticipations of sluggish demand in the wake of the significant coronavirus adversity on the economy.

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