If Microsoft made cars, the joke goes, they would crash twice a day, need regular upgrades and have to be replaced every time the lines on the roads were repainted.
But Microsoft does not regard car software as a subject for jest. Last week the software giant demonstrated the first production cars, Fiats and Alfa Romeos, running the full version of Windows Mobile for Automotive at the Geneva motor show. On Thursday it will show off a Volkswagen concept car offering full internet access at the CeBIT technology exhibition in Hanover.
The car is the latest battleground for control of the operating system. Microsoft Windows already has a near-monopoly on desktop PCs, and the company has since assaulted markets for servers, mobile telephones and portable digital assistants. Using a cut-down version of Windows, the company is also providing the operating systems for television set-top boxes and manufacturing equipment, including robots in car factories.
“What we are looking at really is the car as a mobile PC,” says Manuel Simas, European automotive business development manager at Microsoft. “The way we see it, the driver is just a driver but everyone else is either in the home or office. It is about the digital lifestyle and integration between the car, office and home.”
In the push to make its products ubiquitous, Microsoft is aiming for control of the operating system for the car’s “infotainment” systems – the technology that controls music, satellite navigation and even mobile phone connections. Last week’s launch of three Fiat cars running Windows was the first step in introducing the brand to drivers, and Microsoft says at least one other carmaker is poised to follow.
“This market is still at a formative stage,” says Dan Benjamin, transportation analyst at ABI Research. “This generation of products is going to be a major test for Microsoft, who have to prove their reliability and ease of development.”
Customers opting for Fiat’s “Blue & Me” system, a version of Windows, will get the first cars with a factory-installed USB port, allowing almost any music player to be plugged in. They will also get a wireless Bluetooth link, allowing hands-free use of most mobile phones. Navigation connections, allowing external mapping devices or built-in navigation, will be offered soon. Music, telephony and navigation will all be voice-controlled, so drivers will not have to fiddle with their iPod or phone keypad to change tracks or make calls.
Giuseppe Bonollo, who oversaw the development of the system for Fiat, says the low price – €220-€300 ($260-$360) for the music and Bluetooth link – should boost take-up. He hopes to get 10-15 per cent of customers to opt for Blue & Me, against less than 5 per cent currently taking Fiat’s factory-fitted hands-free kits.
He says having Microsoft’s branding on the dashboard screen and the Windows logo on a button on the steering wheel is a positive advantage for Fiat. “We are delighted to be in a position to communicate to our customers that we were the first with Microsoft,” he says.
But it remains unclear whether Microsoft will be able to convince many carmakers to give up their branding on the car operating system, something all have insisted on until now.
At present Microsoft’s biggest competitors in the car market are industrial operating systems such as WinRiver’s VxWorks, the free Linux and QNX Neutrino, none of which would be branded for customers to see. Microsoft has been quietly competing with these for several years without drivers’ knowledge, running versions of Windows on cars from 19 companies but without visible branding.
The advantage Microsoft has is the easy access to software developed for other devices and for PCs, such as its Media Player for music and video. It also has instant compatibility with many portable devices already running Windows. Other software, such as “telematics” allowing internet access, and even remote diagnostics of technical problems, is also being developed.
In the long run, selling additional software to drivers offers the biggest opportunity in the automotive area, says Mr Simas, with the licensing of the operating system not a big money-spinner. He believes that when today’s teenagers buy their first car they will insist on connectivity with their home equipment and personal digital assistant, and will want to run programmes they are familiar with, such as Microsoft’s Office suite.
“Today’s internet kid is used to instant messaging, immediate data download,” he says. “In five to 10 years when he wants to buy a car he will expect it there too.”
However, it is difficult for Microsoft to exploit its advantage because carmakers have so far been unwilling to risk letting drivers install their own software. Manufacturers have maintained a strict separation between the infotainment software and critical functions such as brakes or airbags, but still believe any software problems visible to the customer would undermine their image.
“After some of the fiascos like iDrive [BMW’s much criticised infotainment system] and pushing the electronics too far at Mercedes, they are likely to be a lot more conservative in future,” says Mr Benjamin. Still, Fiat’s decision to install a USB port, potentially opening up the system to the outside world, is a big step, and goes further than any other manufacturer.
Mr Bonollo says the company is preparing to allow upgrades of the system so it can be made compatible with new music players and navigation computers. It is also considering whether customers should be able to download and install the upgrades themselves using a USB data storage device. It could decide that upgrades should be possible only at dealerships in order to minimise the risk of security problems with the software.
The need for upgrades is clear. Software quickly becomes outdated, but most drivers buy their car for a minimum of three years, and the average car stays on the road for 13 years.
Even the latest Fiats will need upgrades quickly: they are compatible with iPods, but cannot play music downloaded from Apple’s iTunes online shop because they are not compatible with Apple’s proprietary compression technology.
“Normally with embedded electronics it gets old and if you want to update it with new features you basically have to buy a new car,” says Mr Bonollo. “This is changing the paradigm.”
While it remains unclear whether Microsoft will be the winner, the interconnection of the car with external devices suggests that vehicle manufacturers will be the losers. Already carmakers have lost the revenue they used to make from selling built-in telephones, as almost every driver prefers to connect their own mobile to a car hands-free kit.
Further, the rise of the iPod, and adaptors fitted first to BMWs and now to many vehicle ranges, has begun to hurt sales of built-in CD changers. The USB port and the forthcoming links from the new Fiats to external navigation devices, now available on many personal digital assistants, raises the prospect of losing the lucrative sale of mapping systems, too.
“There might be some traditional devices like CD changers that suffer but it is a natural trend,” Mr Bonollo says. “We want to be more proactive about proposing something new than we are concerned about trying to protect the past.”
