Revenue for the voice recognition software developers in the US is expected to rise at 2.3% per annum to $1.1bn in the next five years to 2017, according to industry research firm IBISWorld.
Driven by a 7.9% increase in private investment in computers and software, industry revenue is expected to grow 5% in 2012 alone, though it has not experienced growth across the board.
IBISWorld industry analyst Kevin Culbert said, "Industry revenue declined during the recession when corporate profits and per capita disposable income fell, causing private investment in computers and software to decline."
The research firm said improvements in per capita disposable income and corporate profit are expected to result in industry growth in 2012 as individuals and companies would spend more on products that incorporate voice recognition technology.
The software developers in this industry license products to companies that produce mobile and consumer devices, including cell phones and global positioning systems and the contracts are often based on a per subscriber or volume base.
In 2012, the industry will see a 28.8% increase in the number of mobile internet connections, with revenue boosted by a growing number of healthcare providers that have adopted electronic health records (EHRs).
As the healthcare sector increasingly streamlines record keeping and similar tasks, voice recognition software is used to conveniently transfer those records, according to the report.
While strong growth is expected on the back of mobile internet devices, open-source software could limit profit margin growth.
IBISWorld revealed that market share concentration within the voice recognition software developers industry is moderate, where the four largest players own 50% of industry revenue.
The two largest players, Nuance Communications and MModal, have rapidly expanded their share of the market during the past five years and have outpaced industry growth and captured an increasing share of the market.
Nuance has grown by an average of 18.2% per year due to aggressive acquisitions, purchasing eight other players, while MModal has increased its US industry-specific revenue at an average annual rate of 5.3% due to its own high level of acquisitions.
