Today’s Financial Post Magazine covers predictive-text software maker Zi Corporation and the Calgary company’s recent hostile takeover offer from American rival Nuance Communications.
One of the masters of predictive-text software is Zi Corp., a little-known 21-year-old Calgary developer that attracted attention after fending off a hostile US$40-million takeover offer in August from its American rival, Nuance Communications Inc. Zi Corp. isn’t turning a profit at this point, but even so, the reason for Nuance’s interest in the company is clear: Zi controls roughly 30% of the growing market for predictive-text software, and sells to giants such as Sony Ericsson and Nokia. If acquired, it would have boosted Nuance’s market share to a whopping 85% to 90%, meaning it would provide software to most of the 1.3 billion cellphones sold around the globe each year.
Apparently the genius of Zi’s software is its tiny size and price – their 30,000 word English dictionary takes up about 100 kilobytes and sells for only 10 cents per handset. Nuance’s motive for a takeover is clear – remove any price competition in the market. Hang in there Zi.
