Gartner Says Worldwide Speech Recognition Industry on Pace to Reach $130 Million in 2003
After Two Years of Declining Revenue, the Industry Shows Signs of Returning to Positive Growth
EGHAM, United Kingdom, Oct. 15, 2003 — The speech recognition market has suffered along with the entire telecommunications industry during the past few years, but the market now appears to be poised for growth, according to Gartner, Inc. (NYSE: IT and ITB).
Gartner analysts said worldwide speech recognition telephony software revenue is on pace to reach $130 million in 2003, up from $128 million in 2002. The speech recognition industry hit its peak in 2000 when worldwide revenue totaled $140 million, but the industry suffered declines in 2001 and 2002.
"There are several signs that the speech recognition industry is maturing. Many implementations provide proof that solutions that use speech recognition can deliver business value, as cost savings or improved customer service," said Steve Cramoysan, principal analyst for Gartner. "The clear market leaders today are Nuance and ScanSoft. Entry by Microsoft, IBM, and Intel into the market is providing significant momentum, and further changes in the vendor landscape are to be expected."
Gartner analysts said the performance of speech recognition engines has been much improved. It is becoming increasingly difficult for vendors to differentiate purely on the basis of speech recognition success rates. Internet-based applications and standards, such as VoiceXML, are gaining market share, providing an increasingly distributed architecture that allows companies to leverage their investment in speech technology and allows services providers to offer speech recognition services to enterprises.
North America is the largest market for speech recognition products, as the region is on pace to account for 61 percent of revenue in 2003. Europe, Middle East and Africa is the No. 2 region, as it is projected to represent 26 percent of the market. Gartner analysts said North America's market share will decline through 2007 as other regions experience stronger growth rates.
Call center and business portal applications are the largest segments for speech recognition products. Other application segments such as unified communications are expected to eventually increase their share of the market. "Unified communications will need to mature, whereas the contact center market is already reaching maturity," Cramoysan said.
Additional information is available in the Gartner Market Statistic report Speech Recognition Telephony Software: Worldwide 2002-2007. This report provides market sizing for 2002, forecast, segmentation and vendor shares for the speech recognition telephony software market. This report is available on Gartner's Web site.
Gartner analysts will provide additional analysis on the telecommunication industry at Gartner Symposium/ITxpo 2003. Gartner Symposium/ITxpo is the IT industry's largest and most strategic conference, providing business leaders with a look at the future of IT. Gartner Symposium/ITxpo is presented around the world throughout the year. For details or to register for Gartner Symposium/ITxpo 2003, visit www.gartner.com/symposium or call 1-800-778-1997. Members of the media can register for the event by contacting Maria DiMasi at 212-699-2734 or e-mailing GartnerEvents@middleberg.com.
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