Speech and imaging software house Nuance is to buy predictive text entry specialist Tegic from Time Warner’s AOL for $265m.

Tegic’s T9 predictive text entry has been extremely successful and is currently installed on over 2.5 billion handsets worldwide. Founded in 1995, Tegic was bought by AOL in December 1999 for an undisclosed sum.

Nuance is seeking to define the future of the mobile user interface and is slotting Tegic’s solutions into a portfolio built around voice control and speech recognition solutions. “The acquisition sets the stage for a new mobile user interface that combines voice, text and touch to dramatically improve the user experience,” Nuance said in a statement.

“The enhanced capabilities of mobile devices and networks have fuelled significant innovation in features and services, but their potential has been tempered by the traditional interface on most mobile devices,” said Paul Ricci, chairman and CEO of Nuance. “Tegic shares our vision of delivering an integrated, superior and flexible user experience for today’s wireless subscribers. Together, we are poised to redefine the way people interact with their mobile devices, delivering a more convenient, simple way for consumers to control features and access information on their phones, and search and navigate the mobile web.”

With the disposal, AOL is set to concentrate on core activities. When it purchased Tegic in 1999, some observers questioned the fit of the two companies. Nuance is a more logical parent for Tegic and the two firms have had a partnership programme in place since 2005. Specifically, Nuance will look to exploit Tegic’s distribution channels for its own mobile products.

While T9 has a massive footprint, Tegic’s other products remain distinctly in its shadow. The firm has a ‘multimodal’ smartphone interface product called XT9 that allows users to shift between different interfaces as well as a text message management software that enables users to colour code messages and modify the fonts.

What development opportunities remain for the core product is not yet clear. Since AOL bought Tegic there have been few alterations to the product. Arguably this is because Tegic got it right first time with a simple, easily comprehensible and useful application – to the frustration of other firms attempting to carve a slice of the predictive text market.

“The two firms are a good fit as the merger ties up both text based input and voice recognition technology,” said Dave McQueen, principal analyst at Informa Telecoms & Media. “So whether the device has a keyboard or not Nuance can supply solutions for both.”