Will it be the game changer Apple's positioned it to be?

Faster hardware, improved battery life, a better camera—all good things, but all expected too. The real surprise in the iPhone 4S is Siri, the voice-activated technology that promises to revolutionize the way we communicate with mobile devices. If Siri rings a bell, you may have used the free Siri Assistant app (now gone from the App Store), which helped users find restaurants, movies, taxis, and more, nearly two years before Apple’s system-wide integration of the technology.

Siri has its roots in the CALO (Cognitive Assistant that Learns and Organizes) project launched in 2003 by SRI International and other researchers. The goal was to enable intelligent, context-aware, question-and-answer interaction with humans using advanced technology. After the project wrapped, SRI chose to mainstream what they had created.

If Siri works as well as advertised, Apple could have another game changer on its hands.

“What Siri brings to the table is the ability to accomplish tasks using a variety of different services simultaneously, with an intimate understanding of context and intent,” explains Norman Winarsky, Ph.D., a vice president at SRI International. “It’s a groundbreaking effort.” Siri was founded in late 2007, and the resulting app debuted for the iPhone 3GS in February 2010. Within three months, Apple had acquired Siri for a rumored $200 million.

By now we’ve all seen Apple’s impressive Siri demo video, but in typical Cupertino fashion, Apple would have us believe the technology is fueled by magic. In fact, Siri uses a variety of web services and APIs to do most of the heavy lifting. While the Siri Assistant app partnered with OpenTable and Nuance Communications (the speech-recognition experts behind Dragon Dictation), Apple’s implementation uses background partners like Yelp, Wikipedia, and Wolfram Alpha.

Just don’t confuse Siri with Voice Control, which debuted on the iPhone 3GS in 2009. While Voice Control can be instructed to play certain music, read the time, and call a contact, Siri is not confined to a limited set of commands. Hold down the Home button for two seconds and the iPhone 4S will start listening for your voice commands. “Find me a great Greek restaurant in Palo Alto,” Apple Senior VP of iOS Software Scott Forstall queried during his demonstration. Siri quickly found Yelp results of 14 Greek restaurants—five in Palo Alto, neatly sorted by user ratings. It also dutifully grabbed NASDAQ stock quotes, gave the current time in Paris, and even parsed differently phrased questions about the weather.

Siri even learns over time, remembering people, places, and things in your life to improve future interactions. For example, when Forstall asked for a reminder to call his wife, Siri didn’t need him to offer her name. This artificial intelligence is what separates Siri from the pack— while many voice-activated services can decode what you’re saying, few can understand the meaning behind the words.

Since Siri requires a lot of computing power, including a wide bandwidth for its data cache, for now it’s an iPhone 4S exclusive. Apple wouldn’t say if Siri will ever run on older hardware, but Winarsky claims getting Siri Assistant to run on the iPhone 3GS required “all kinds of optimizations and shortcuts.”

Still in beta at release, Siri can understand English (including U.S., U.K., and Australian variants), French, and German. It can even take dictation, with a small microphone icon appearing wherever the iOS keyboard appears. Speak the text you want to enter, tap Done, and Siri converts your speech to text, inserting it at the cursor. Siri even works with hands-free devices like Bluetooth headsets, letting you conduct business while you’re out for a run with the iPhone 4S in your pocket. So watch out for traffic, please, or you might be asking Siri for directions to the emergency room.