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Declan McCullagh


DETROIT–Microsoft wants your next car or SUV to run Windows.

It’s no joke. The world’s largest software company is revving up to position itself as the largest supplier of software to car manufacturers, with a custom version of Windows CE controlling everything from in-vehicle entertainment to satellite navigation.

“We’re providing the end-to-end telematic system,” says Peter Wengert, an electrical engineer who is now a marketing manager for Microsoft’s Automotive Business Unit. Telematics is the auto industry’s term for networked cars.

Microsoft is racing to take advantage of what appears to be an inexorable trend toward smarter cars. General Motors says software and electronics already are responsible for more than one-third of the cost of a typical automobile, and an IBM executive predicted this week that the figure will be closer to 90 percent in five years.

Implanting Windows into automobiles makes sense for a company whose share price has been mostly stagnant for four years. While PC sales have slowed and are expected to enjoy future growth rates only in the single digits, in-car computing remains a young market. Also, Linux has become a real threat to Microsoft on desktops and servers–but it’s not as established in the automotive arena.

The giant comes a-courtin’
Microsoft accelerated its efforts to woo car makers with one of the largest booths at a Detroit conference this week, where a Hummer H2 and a Volvo–both outfitted with versions of Windows Automotive–drew curious crowds. Windows Automotive is based on Windows CE, which has also spawned spinoffs for handheld computers and mobile phones, and offers licensing fees between $3 and “under $100.”

Inside the Hummer were microphones and speakers connected to a Windows box (typically a 300-400 MHz PC with 32MB of RAM and 32MB of flash memory) hidden under the back seat and outfitted with a GPS receiver and Bluetooth wireless technology. The idea is that drivers will use their own Bluetooth-equipped cell phones and existing wireless provider to link up to the Internet, especially MSN services that can provide road-related information on demand.

“When I say, ‘Get my driving directions,’ I can say ‘Get my cheapest gas,'” Wengert said. “It finds the nearest gas station and the cheapest gas station because it knows the location of the car.” Wengert also demonstrated how the in-car speakers could be used to make phone calls, but with less luck: it took him four tries before the computer got the phone number right.

Windows Automotive, by the way, does not share a network with the low-level systems of a vehicle–so a software crash won’t result in, say, brake failure.

Microsoft’s entry into the automotive market isn’t exactly new. Since 1998, the company has been selling Windows-based navigation systems that show overhead maps on LCD screens in the dashboard. Some two dozen models from 10 car makers use that relatively expensive technology, Microsoft says.

Making the LCD screen optional, however, makes the system cheaper and reduces worries about distracting drivers. Starting with its 2005 models that go on sale in a few months, Fiat will offer Microsoft’s hands-free technology as an option on 23 models. (Fiat sells cars under the Fiat, Lancia, Alfa Romeo and Ferrari brands.)

A little mood music for the ride
Another market that’s viewed as ripe for computerization is in-car entertainment, which is still dominated by CD and, especially in larger SUVs and minivans, DVD players and video game players. That seems about to change, with billion-dollar electronics suppliers such as Thomson, Pioneer and Delphi saying this week that they’d like to find ways to let drivers take the equivalent of their home entertainment systems on the road.

Microsoft’s answer is simple: because there’s already a Windows box with speakers in the vehicle, just provide a connection where drivers can plug in their USB device, Compact Flash card, or SD Media card with audio files on it. (The Hummer has a connection on the dashboard.)

“What happens when I want to bring digital music into the car? It’s a little tough to stream that over cellular networks,” Wengert says. “Our philosophy is to put your music on a storage device. That’s going to be a lot cheaper. People don’t want to have to buy an iPod to play their music.”

Apple Computer’s wildly popular iPod does offer a USB connection, but in an effort to curb piracy, hides the music files when it’s connected to a PC. Wengert says whether it will work on a Windows Automotive system is a “question for Apple.”

Wengert argues that Microsoft is a more attractive option than Linux or other free or open-source operating systems: “Car companies want their supplier to have skin in the game. Who would Ford go to for support and help if they adopted Linux?”

Rival suitors
Microsoft is hardly alone among traditional computer companies trying to convince auto makers to take their technology for a test drive.

IBM, one of the most influential Linux proponents, also is aiming for that market. It said this week that it had developed a software platform for a DaimlerChrysler subsidiary based on open standards, and is supplying a hands-free navigation system to Honda as standard equipment in the 2005 Acura RL and as an option on the 2005 Acura MDX and 2005 Honda Odyssey. And last year, IBM signed a deal with BMW to collaborate on software design.

In addition, Texas Instruments announced on Tuesday a complete in-car multimedia system that integrates satellite radio, CD ripping and access to home networks.

TI is backing Bluetooth and Wi-Fi as ways to solve the surprisingly difficult problem of making it easy to load up a car’s hard drive with high-quality music. “Users aren’t going to install Ethernet ports in their garage or drag removable (hard drives) from their PC to load content onto their radios,” Curt Moore, a TI product manager, said in a statement.

Longtime industry watchers, however, caution that enthusiasm for computerized cars sometimes outstrips what consumers actually want. Four years ago, Sun Microsystems and General Motors proclaimed that Java would be the computing standard for the auto industry. That never happened.