This battle pretty much relates to speech as used on BlackBerries and Mobile Cell phones.  The company is switching speech engines and has a battle ongoing with Nuance, who maintains the current speech engine developed by IBM and is now exploring the engine from AT&T.  BD

Vlingo, the Cambridge, MA-based startup that makes a suite of speech-to-text applications used by millions of iPhone, BlackBerry, and imageNokia mobile device owners, is about to get a brain transplant of sorts. It said today that it will largely abandon a core speech-recognition engine developed by IBM and maintained by Nuance Communications in favor of a system from AT&T Labs in New Jersey.

As part of the shift, says Vlingo CEO Dave Grannan, Vlingo and AT&T have agreed to a long-term strategic alliance. Vlingo’s speech scientists will be able to modify and improve the source code for the AT&T technology, called Watson, while AT&T will take a minority ownership stake in Vlingo. All of Vlingo’s applications will be running on top of the AT&T speech-recognition system by the first quarter of 2010, Grannan says.

Vlingo isn’t breaking its three-year contract with IBM, and may actually continue to use the IBM speech recognizer in simple deployments, Grannan says. But by moving its main products to the AT&T technology, “We now have what we think is a much more strategic partner in the space,” he says.

New Speech Recognition Engine Under the Hood at Vlingo; Startup Dumps IBM and Nuance for AT&T | Xconomy

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