Microsoft increases stake in auto industry

Posted by John Tay
7 May 2013
Microsoft increases stake in auto industry

Having reshaped a big piece of the world's economy around its Windows software, Microsoft Corp. now wants to do the same thing in the car business.

Microsoft is part of a wave of computer industry titans -- with Apple, BlackBerry, Google and others -- competing to play a more critical role in cars. The prize, as they see it, is the expanding and highly profitable part of the car that is evolving as an operating system.

Today that business is largely confined to vehicle infotainment systems, which allow drivers to speak by phone, hear traffic conditions, receive e-mails and find restaurants. But in Microsoft's vision of the future, vehicle intelligence will get more sophisticated.

As smartphones, information apps and other consumer devices perform more ambitious functions, software providers will take a bigger role in vehicle development. And when that happens, software companies will begin to influence other component decisions, including steering, seating and interior cabin functions.

Software companies see another potential line of automotive business. When cars have a single, unified operating system somebody will have the opportunity to regularly update the vehicle systems -- ideally for a fee -- in the same way that computer industry firms now update phone apps and software programs.

Microsoft wants to pull the auto industry in this direction. And with revenues of $74 billion and net profits of $17 billion for the fiscal year ended last June 30, Microsoft is a cash-rich force to be reckoned with.

It has been promoting Windows to automakers for a decade now. Ford Motor Co., Fiat Group and Kia Motors Co. rely on Microsoft platforms to coordinate functions such as radio and music storage, e-mail delivery, navigation and personal schedule updating.

Microsoft helped to develop Ford's popular Sync hands-free communications system, which is spreading across Ford's portfolio, as well as Fiat's Blue & Me system.

But Microsoft's automotive engineers and designers say that they are just warming up, and that their future product offerings will help cars move into a new era of smart technology.

Related Article: US kia to sport advance infotainment system powered by Microsoft UVO 

By:  Lindsay Chappell, Automotive News 


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