The battle to control your vehicle's dashboard looks to be heating up and it's a fight that might ultimately lead consumers to switch to devices that use different operating systems than the ones they currently use.
In March Apple (NASDAQ:AAPL) announced CarPlay, which allows people to control entertainment, driving direction, managed calls, emails, and texts, and it also has other uses. Microsoft (NASDAQ:MSFT) countered by showing a prototype of its Windows in the Car system -- an attempt to bring Windows 8 and its Metro interface into vehicles -- at its April 2, developers conference.
What is CarPlay?
Introduced on March 3, CarPlay is an attempt to more fully integrate iPhones with the native entertainment system/in-dash screen in a range of vehicles. According to an Apple press release the system "gives iPhone users an incredibly intuitive way to make calls, use maps, listen to music, and access messages with just a word or a touch. Users can easily control CarPlay from the car's native interface or just push-and-hold the voice control button on the steering wheel to activate Siri without distraction."
Vehicles from Ferrari, Mercedes-Benz, and Volvo already use it. Apple has also announced partnerships with Ford (NYSE:F), General Motors (NYSE:GM), Honda (NYSE: HMC), Toyota (NYSE: TM), and a number of other manufacturers.
Why do Microsoft and Apple want to control your dashboard?
Steve Teixeira, director of program management for Microsoft's Internet of Things team, gave a presentation at the company's April developers conference on the idea that the connected devices of the future won't necessarily look like today's computers, tablets, and phones. IDC believes that this new market for intelligent systems could grow as large as $1.7 trillion by 2017, he told the crowd.
The auto and transportation segment of that market will grow to $7 billion in 2017, if the IDC prediction comes true.
"There's going to be a lot of demand," he said.
Teixeira cited a study from Eriksen Across, which said that by 2020 the Internet of Things would include 50 billion connected devices, and another from Morgan Stanley that said that there would be 75 billion. "Six months after that another IDC study came out and said, no, actually the number is 212 billion," he said.
Whatever the number, Microsoft has a plan to bring Windows to as many of them as possible.
What is Windows in the Car?
Microsoft is not new to the in-vehicle game. The company, according to Teixeira, has been in the space for more than 15 years with many of the cars on the road today already using Windows or its stripped-down cousin Windows CE Automotive.
"The way that people have been doing this to date is using embedded as the core operating system kernel upon which they build their own user experience," Teixeira said. That approach left Microsoft's Windows in the background and it did not give the company the opportunity to create a dashboard experience.
Going forward -- while the company plans to keep supporting its existing partners that use the old system -- Microsoft has built a product that allows the in-dash "infotainment" system to let people interact with a Windows device brought inside of a vehicle. You will use dashboard controls to access your Windows-based phone or tablet in a way similar to that of Apple's CarPlay.
The new offering will use a connectivity standard called Mirrorlink and recent Microsoft acquisition Nokia has been an early adopter of this standard. A number of car companies are already developing vehicles that use the technology. Windows in the Car, through Mirrorlink, will allow connectivity between vehicles and devices, which will let customers improve their in-vehicle options as they upgrade their phones.
"I keep my cars for maybe eight years and my computer in the car kind of gets longer in the tooth every year, but I change my phones like I change my underwear," Teixeira said.
Like CarPlay, Windows in the Car is a user interface customized for use in the car and optimized for the narrow window when people have to do things other than keeping their eyes on the road while they drive. Both systems will be heavily voice-driven -- Apple's through the Siri interface and Microsoft's using its newly introduced Cortana voice assistant.
CarPlay is currently available on select cars while Windows in the Car is only in the concept stage and no release date has been announced.
Control the dashboard, control the customer?
While the coming future may include everything from your toaster to your light sockets and your toothbrush being connected to the Internet, car dashboards look to be the next battleground where these companies will compete for customers. The fight for users involves a bigger battle than selling an individual device -- it's more about pulling people into a company's ecosystem.
Since a car is usually the second largest physical purchase people make after a home, the technology in a vehicle can lead people to change their loyalties. Of course a dedicated Apple or Microsoft fan might seek a vehicle that meshes with their tech but many people won't base their choice of a vehicle on whether it integrates with their phone. Instead some may switch phones to one that works well with their car.
If your car has a Microsoft OS this makes it more likely that you will want a Microsoft phone, tablet, computer, and any other devices that will then interact well with each other. With Apple and Google's (NASDAQ: GOOG) Android dominating the phone and tablet markets, deals that get Windows onto vehicle dashboards give Microsoft a backdoor way to expose customers to its OS and maybe lure them into switching teams.
In the way that iPhones were the gateway to iPads and MacBooks for a lot of people, perhaps Windows in the Car can be a catalyst to ignite the Windows Phone and tablet markets.
Daniel Kline is long Microsoft. The Motley Fool recommends Apple, Ford, and General Motors. The Motley Fool owns shares of Apple and Ford. 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.