Microsoft’s Windows in the Car vs. Apple’s CarPlay: The Business of Smart Cars

Microsoft just revealed Windows in the Car, an attempt to roll out a hybrid operating system for the auto industry. How does it stack up against Apple’s CarPlay and other competitors?

Apr 8, 2014 at 10:36AM

Microsoft (NASDAQ:MSFT) recently revealed Windows in the Car, a conceptual platform to adapt Windows Phones' apps and functions into vehicle dashboards, during its 2014 Build Conference. The platform's interface resembles a hybrid of Microsoft's mobile and desktop operating systems, and the user interface is streamlined for voice commands.

Windows in the Car uses MirrorLink technology, which combines a wide array of wired and wireless technologies into a "standard language" for smartphones to synchronize with car dashboards. MirrorLink is the official technology of the Car Connectivity Consortium, a group of auto and electronic manufacturers dedicated to developing open standards for smartphone to car communications.

The consortium includes auto manufacturers Honda, Toyota, and Volkswagen, as well as car audio companies Alpine and Pioneer. MirrorLink devices are currently compatible with select Google (NASDAQ:GOOG) (NASDAQ:GOOGL) Android phones from Sony and Samsung, as well as older Nokia Symbian phones.

Windows For The Car Demo Frequent Contacts

Windows in the Car. Source: Microsoft.

Apple's (NASDAQ:AAPL) new CarPlay for iOS devices, a similar infotainment and navigation system, is not compatible with MirrorLink. Google is also working on a similar project, known as the Open Automotive Alliance, which replaces other in-car technologies with Android.

The unexpected gatekeeper
Microsoft, Apple, and Google are clamoring for a piece of the "smart dashboard" market, but here's the ironic twist -- the auto market's gatekeeper is fallen smartphone giant BlackBerry (NASDAQ:BBRY).

BlackBerry might only have a 0.6% global market share in smartphones, but it owns QNX, a Unix-like operating system designed for embedded devices. Analysts estimate that QNX has a whopping 50% to 70% market share in automobile infotainment systems. QNX is compatible with Java, HTML5, OpenGL ES, and Android packages -- making it a software developer's dream platform.

BlackBerry also leverages partnerships with Apple, Nuance, Slacker, Weather Network, and other companies to integrate iOS devices, speech recognition, streaming Internet radio, local weather forecasts into its QNX CAR platform.

It's a lucrative package, and one that convinced Ford to dump Microsoft's Windows Sync, its forked version of Windows CE, for QNX in February. Ford stated the switch was made because QNX was cheaper to license, but analysts believed that it was also because QNX was more stable and feature-rich than Windows CE.

The upcoming clash between QNX and Android
Apple designed CarPlay to work with QNX, just as Microsoft built Windows in the Car to be compatible with MirrorLink. Neither Apple nor Microsoft ever planned to design a brand new "smart" OS for cars from the ground up. Rather, both companies are rolling out new systems that are compatible with existing ones.

Apple's CarPlay mirrors an iOS display in a similar manner to AirPlay's mirror feature for iOS and OS X devices. However, CarPlay integrates an "eyes free" mode for Siri, enhanced satellite navigation, hands-free phone controls, music controls, and iMessage features into the dashboard. Apple's CarPlay is already backed by a plethora of auto manufacturers, including Ferrari, Mercedes-Benz, Volvo, BMW, General Motors, and Nissan.

Apple Carplay Home Screen

Apple's CarPlay. Source: Apple.

Google, on the other hand, is planning to stage an Android-like coup of the auto market with the Open Automotive Alliance (OAA), introduced in January to establish a common platform for Android integration in vehicles. Since Android is the dominant mobile operating system in the world, the alliance has already attracted major companies like General Motors, Honda, Audi, Hyundai, and Nvidia. The alliance has a shared goal of equipping the first cars with full Android integration by the end of 2014.

Why Windows in the Car might not matter
Although QNX is installed in up to 70% of modern vehicles, the fact is that Apple and Google remain the dominant names in smartphones. Apple still controls 38.7% of the U.S. smartphone market, while Google Android devices account for 55%, according to recent figures from Kantar. Therefore, smart car technologies like MirrorLink and QNX must be compatible with iOS and Android devices, but not necessarily vice versa.

That's why Windows in the Car will have a tough time getting off the ground. Windows Phone devices only account for 5.3% of the U.S. market. To make matters worse, Microsoft's reputation in the auto industry has been on the rocks ever since Ford dumped Windows Sync.

Auto manufacturers are eager to support Apple's CarPlay and align their vehicles with Apple's sleek iPhones, but I doubt that the same manufacturers will flock to Microsoft. To top all that off, Microsoft has gone with MirrorLink tech, which has lost significant market share over the years, instead of market leader QNX.

Why Windows in the Car might matter
Those challenges are certainly daunting, but Microsoft believes that it can overcome them with new features. During its demo, Microsoft demonstrated that Windows in the Car was focused on four key goals -- reducing the "cognitive load" (need to think) during driving, the driver's "eye time" on the screen, minimizing the effects of different screen sizes, and replacing virtual buttons with more voice commands.


Ford and Windows, during happier times. Source: Wikimedia Commons.

Moreover, just because the dashboard system runs on Windows doesn't mean that it will only be compatible with Windows Phones. Not all QNX vehicles, for example, are compatible with BlackBerry phones, and not all Windows CE/Embedded Automotive 7 vehicles are compatible with Windows Phones. Therefore, Windows in the Car might gain steam if Microsoft plays nice with other mobile operating systems -- something that Apple doesn't plan to do with CarPlay.

In conclusion, the battle for your vehicle's operating system will heat up considerably over the next few years. Gartner analyst Thilo Koslowski believes that 80% of new vehicles will be equipped with infotainment units by 2020, up from just 40% today -- leaving a new battlefield wide open for Apple, Google, and Microsoft to continue their pitched battle for supremacy in cloud-connected devices.

The biggest thing to come out of Silicon Valley in years
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now ... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.

Leo Sun owns shares of Apple. The Motley Fool recommends Apple, Ford, General Motors, Google (A shares), Google (C shares), Nuance Communications, and Nvidia. The Motley Fool owns shares of Apple, Ford, Google (A shares), Google (C shares), Microsoft, and Nuance Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information