With prices rising for both cars and gas, selling points for car makers are coming down to either fuel efficiency or additional features that set their cars apart from the rest of the crowd. Toyota
Here comes the news
With this partnership, Toyota enters a space already crowded by many car makers who provide similar services. Among the most notable ones is General Motors'
So what is Microsoft's true motivation here? Facing immense and potentially threatening competition from rival Apple
Up in the cloud
This is all part of a bigger cloud computing play here. Cloud computing is where the bigger players are headed, and obviously Mr. Softy is targeting one very specific element of that: cars. With Apple running over competition in hardware, it is probably a wise move for Microsoft to take its cloud computing platform Azure to the automotive industry, where the competition is somewhat less stiff and certainly less well-capitalized. With more smart cars set to roll out in the coming years, and with Toyota being another consummate top-level player in the auto business, Microsoft can actually look at this as a potential profit center going forward.
Reinventing itself on the web-based technology sector is the best way to shield itself from competition as far as Microsoft is concerned. Other customers for Microsoft's cloud based products include 3M
How Fools stands to gain
So, how does Microsoft benefit from this deal? One of the arrangements in this new smart car technology is that it will allow consumers to control and monitor in-car data through the use of smartphones. Microsoft is surely going to make use of this arrangement to bring in more business for the Windows 7 mobile phone platform.
Also, this new line of business can open more inroads for Microsoft into the cloud computing sphere. Many other players in the automotive industry use Microsoft platforms such as the TellMe voice application. With the demand for smarter, cleaner, and technologically loaded cars rising every year, Microsoft should definitely benefit from this association. As an investor who has put money on Microsoft, you can actually look forward to a good run with greater confidence. After all, this is one area where Apple is yet to topple Microsoft's A game.
Arunava De does not won shares of the companies mentioned General Motors, 3M, and Microsoft are Motley Fool Inside Value recommendations. Apple and Ford Motor are Motley Fool Stock Advisor recommendations. Motley Fool Options has recommended a bull call spread position on Apple. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Apple, Ford Motor, Lockheed Martin, and Microsoft. Alpha Newsletter Account, LLC owns shares of Microsoft.
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.