Apple's Acquisition of Siri Hints at Voice-Activated iPhone Strategy

Last Updated Apr 29, 2010 12:09 PM EDT

For a company whose every move is scrutinized by legion sof fans and pundits, the coverage of Apple's acquisition of a small company called Siri has been rather muted. Found by Robert Scoble in a Federal Trade Commission filing, it may be that the story was simply overwhelmed by HP's acquisition of Palm, or the ongoing kerfuffle over Apple's lost iPhone 4G.

Or it may just be that most people aren't quite sure what to make of Apple's decision to buy a relatively small company that makes a single iPhone app. But the technology behind that app makes the acquisition very meaningful, indeed.

Siri, in case you're not familiar with it, makes something called a virtual personal assistant. The idea is that the app should be able to help you find anything a real assistant would: flight times, a restaurant or hotel room, a good concert to go to.

In practice, most programs fall seriously short of emulating a personal assistant. Not Siri. I've used the app since it was released, mostly through its excellent voice recognition capabilities, for tasks like ordering cabs, finding takeout restaurants, and quickly looking up the weather. It's a great tool.

But hold there, before you assume that Apple picked up Siri to help iPhone users get home from bars. It's true that right now Siri is mostly aimed at six categories of activity, like finding out events or restaurants. But those activities are actually all just incidental to Siri's underlying technology.

The hint that Apple has latched onto something big is that Siri actually re-purposes technology from a massive military artificial intelligence research project called CALO. Considered one of the biggest AI projects ever, CALO was intended to emulate some of the organizational and management activities that make our brains superior to computers.

Siri builds atop technology from CALO that's specifically intended to interpret commands, then delegate them to the appropriate sub-programs. So when I wake up in the morning and mumble "What's the weather?" at Siri, it parses what I said and adds some information -- probably my zip code -- before sending it off to a weather service, which then gives me a forecast.

This technology could fit incredibly well into the single-tasking mentality that Apple has adopted for the iPhone and now the iPad. This isa very different paradigm from the multiple-window, multi-tasking model used with personal computers. Imagine using Siri not just to find a restaurant, but to navigate around your device and the internet -- the program could easily be adapted to instantly open your favorite e-book or run an application.

The factor that really distinguishes Siri from the competition is not its ability to tap into a web of other programs, but its ability to decipher human language and phrasing. Siri doesn't always get what I'm saying right, but it's light-years ahead of the clunky voice-recognition systems we're familiar with from customer support lines.

Of course, if you know anything about semantic technology, you'll realize that it would be incredibly challenging for Apple and Siri to expand the scope of the app. The only proof that it can be done at all is Siri's success so far. But Apple is a savvy company, and there's more evidence that it has made an important purchase in Siri.

There's no official information on the acquisition price -- Siri's representatives have been close-mouthed -- but both Scoble and Michael Arrington peg the price at north of $200 million, which insider blog peHUB confirms. That's not a small amount, especially for a company that has probably made little to no money yet.

Further, Siri's app has only been available for a little over two months. It's hard to believe that Apple would pull the trigger so quickly on an acquisition unless it was truly blown away, not to mention scared of a competitor like Google beating it to the punch.

So now Apple has an ace in the hole to keep its mobile products unique from its competitors. And the bottom line is that, because Siri is built on CALO technology (under an exclusive license, according to what founder Dag Kittlaus told me a couple years ago) it won't be easy for another startup to quickly replicate what it does. Once again, Apple is ready to prove that it's a master at holding a competitive edge.