ScanSoft's products are based on patented optical character recognition ("OCR") and image processing technologies. They are designed to address the needs of a broad group of users ranging from consumers and small office to medium-sized businesses and large corporations.

ScanSoft's software products include OCR, personal document management and software suites that offer various combinations of these products and often third party offerings. These products capture and convert paper documents and photos into digital documents and images, making them easier to edit, organize, E-mail or post to the Web. ScanSoft believes that its ability to achieve broad market acceptance of its products will depend on several factors, including, but not limited to, ease-of-use, OCR accuracy, speed, and overall functionality. In addition, the ability of ScanSoft's software to integrate with desktop operating systems, word processing applications, e-mail software, fax applications, image editing products and Internet publishing tools will affect ScanSoft's ability to achieve market acceptance for its products. In that regard, ScanSoft's strategy is to maintain and enhance its technological position by investing in OCR and image processing technology and strategic business and technology partnerships with other leading companies.