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Thursday, July 31, 2008

Microsoft to build on auto unit

Slashdot It! Detroit may be struggling to sell cars, but Microsoft Corp. sees nothing but room to grow in its push to wire them. The Redmond, Wash.-based software company today will announce a massive new investment in its automotive business unit and tapped a Detroit native to lead the charge. "We're doubling down. We're going to increase the headcount and operating expenses by 30 percent this year," said Tom Phillips, a 16-year veteran of Microsoft who will replace Martin Thall as the head of the company's automotive division. "We know that things are tough for the auto industry, but it's the perfect time to make this investment. There are new customers coming into the market, and they are looking for new experiences." Microsoft works closely with a number of car companies to bring computer connectivity and infotainment to the automobile. The most visible fruit of those efforts is Sync, the product of Microsoft's collaboration with Ford Motor Co. that debuted last year and has already given the Dearborn automaker a much-needed boost with younger car buyers. It allows motorists to control their cell phones, music players and navigation systems with voice commands. Phillips, who is currently the chief technical officer of Microsoft's specialized devices and services group -- a post he will continue to hold in addition to running the automotive operations -- told The Detroit News that Sync is just the beginning. "There are a lot of technologies that are two to three years out that are going to provide even more connectivity and innovation," he said. "There's such a disconnect between what people experience in their cars and what they experience in the rest of their lives. It hasn't really evolved that much." Microsoft announced one today, saying it is now making its "Live Search" technology available to automakers. Using it, they will be able to develop in-car systems that allow drivers to search for nearby businesses. Despite a deepening downturn in the United States, Phillips said the auto market is too big for Microsoft to ignore. The company already dominates desktop computing. He said the 820 million cars in the world are the next great frontier to conquer. "Even if you get a 10 percent or 20 percent market share, you've got an enormous scale," he said. Ford welcomed Microsoft's new investment in automotive research and development. "Ford and Microsoft working together to deliver Sync has been a great experience and demonstrates what can happen when the power of two iconic brands comes together," said Jim Buczkowski, director of electrical and electronics systems engineering at Ford. "Ford Sync has proven to be a tremendous differentiator for us in the marketplace and working with Microsoft has been the key element in setting the industry benchmark for connectivity." Ford recently passed the 200,000-unit sales milestone and is on track to deliver one million Sync-equipped vehicles by the end of next year. More importantly, Sync has dramatically increased Ford's appeal to younger drivers, according to company survey data. And it has helped Ford increase the average transaction price of its entry-level Ford Focus sedan by $1,000 over the past year. "Clearly, the customers are recognizing the value and they are willing to pay for it," said Ford Americas President Mark Fields. Get Daily Updates via Email Protect your computer with Windows Onecare

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