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While Apple is known for bringing revolutionary products to market, it should also be recognized for its acquisition savvy. Take its shrewd acquisition of Siri, developer of the eponymous voice-activated personal assistant, for close to $200 million. We've all been listening to Apple's advertisements for the new 4S iPhone showing users accessing Siri. Literally overnight Siri became a household name, and for good reason. You become the lord over "your humble servant" Siri, so ready to be commanded, all for $199.

No wonder Apple sold 4 million 4S iPhones in 3 days, its most successful product launch ever. The profits from that one weekend probably more than covered Siri's acquisition costs. Talk about bang for the buck.

But that's just the beginning. Expect Siri to become part of the iPad and Mac experience as Apple upgrades these products. Right now Siri doesn't perform many functions, but Apple says it intends to link Siri to more databases over time. As I've noted, Siri is an evolutionary product, one that will open a new dimension to communication:

Apple's iPhone 4S just revolutionized how we communicate with the introduction of Siri, the world's first serious stab at artificial intelligence. Just as the iPhone revolutionized the cell phone, Siri will revolutionize the smart phone. Apple has just transcended the known world of the smart phone.

It's an entry into a new world in which people converse with machines:

Siri will become both a trusted advisor and a friend, one you can carry around in your pocket, and the iPhone, as a result, will become an even more integral part of your life.

The opportunity for Siri is boundless.

In his biography, Steve Jobs, known for his secrecy surrounding new Apple products, nevertheless spilled the beans: He had come up with an exquisite new TV.

It will have the simplest user interface you could imagine. I finally cracked it.

Could that "interface" be Siri? Voice-activation would be an elegant solution for creating an integrated television, simplifying how viewers order up their television entertainment. Siri could help Apple enter a gigantic market that could ultimately dwarf the smartphone business.

Contrast Apple's smart purchase to Hewlett-Packard's acquisition-happy $43 billion six-year shopping spree, in which HP gobbled up EDS, 3COM, Palm, 3Par, and now the very expensive Autonomy. HP's floundering moves did little, if anything, to boost its free cash flow. Average yearly FCF of $8.9 billion didn't budge from its 2006 $8.8 billion FCF. New CEO Meg Whitman has renounced "big acquisitions."

Rest assured, for a meager $200 million, Siri will alter how we interact with machines. Apple's purchase of Siri may be one of the great acquisitions of all time, building a still bigger moat for the company. With the addition of Siri, investors can look forward to years of strong revenue and earnings growth. Apple is a buy.

Disclosure: I am long AAPL.

Source: Apple's Siri Acquisition Bears Fruit