Microsoft’s (NASDAQ:MSFT) head of research, Rick Rashid, unveiled the prototype of a universal speech translator during a speech at Microsoft Research Asia’s 21st Century computing event.  While this product is still in the prototype stage without any signs of hitting production soon, we think this demonstration has and will impact the company in a positive manner. Specifically, Microsoft is getting a lot of publicity from the product preview, which helps portray it as a company focused on innovation. Additionally, we think that over the long term some aspects of this product will help Microsoft improve its Office suite and the Windows Phone 8.
Microsoft is Focused on Innovation
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Microsoft is garnering publicity from the preview of its universal speech translator and of late has been getting accolades for innovation for its other products as well, something it desperately needed after having spent a decade being viewed as an entity that takes advantage of its market leading position in the PC industry by pushing out products which lack innovation.
In our opinion, this is a well-timed release as it coincides with Microsoft’s release of other innovative products such as Windows 8, Windows Phone 8 and the Surface tablet. We aren’t sure if the translator preview will have a direct impact on sales, but it will positively influence Microsoft’s brand value and may drive sales indirectly.
Integration with Microsoft Office
The translator was quite accurate in converting Rashid’s spoken English to written English during the presentation. We think this product feature is something that Microsoft should include in the Office suite, specifically integrating with Word. If the company is able to do that, users will no longer have to pay extra for speech-to-text products, and can also strengthen its Office suite.
Additionally, the translator program was able to effectively change Rashid’s speech into Chinese words. This feature is likely to help enterprises that collaborate internationally as accurate speech-to-text translation can make it easier to write emails in the native languages of clients and colleagues.
Integration with Windows Phone 8
Another value proposition for this product comes from its potential integration with Microsoft’s Windows Phone 8. As integration with the phone will give the product portability, users will be able to break down language barriers on the go. The product can be extremely attractive for travelers unfamiliar with foreign languages and will help them communicate better with people in their local languages.
We currently have a $41 price estimate for Microsoft, which is approximately 40% above the current market price.Notes: