One thing that the otherwise superior iPhone is lacking is the ‘speech and navigation,’ which’s on the other hand, is the trump card of iPhone’s competitor Google Android. “All text fields on Android devices are speech-enabled, including email, SMS and the search box on any site. However, iPhone offers “voice control commands” that allow users to initiate a call or play music with speech. But the breadth of what you can do on the iPhone with voice is much more narrow. There is of course voice search on the Google and Bing apps, but that has to do with Google and Microsoft’s own technology and nothing to do with Apple.
Several news sites are reporting that Apple is in the process of some sort of deal with Nuance Communications, one of the leading companies in the field of speech recognition. Many readers may be familiar with Nuance's Dragon NaturallySpeaking software, however the Dragon speech engine is also licensed and used in a number of apps for Windows, OS X, iOS, and Android.
Nuance also provided the front-end speech capability to Siri, which Apple acquired almost exactly a year ago. Nuance also offers speech-powered apps (e.g., Dragon Search) for the iPhone and has an excellent speech-enabled keyboard in FlexT9 for Android.
Some have speculated that this deal would be an outright acquisition (and there was a rumor last year to that effect). Any acquisition price would perhaps be prohibitively high (more than $6 billion) and include an enterprise business that is generally unrelated to anything else Apple is doing. So some sort of speech licensing deal with Nuance is more probable.
Apple's got the cash, but even for them that would be quite a purchase. TechCrunch thinks it's most likely the two companies are entering into some sort of partnership "that will be vital to both companies and could shape the future of iOS."