Last April, Microsoft (NASDAQ:MSFT) unveiled Windows In The Car, a conceptual infotainment platform to compete against Apple's (NASDAQ:AAPL) CarPlay and Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) Android Auto. Like those two products, Windows In The Car mirrored a smartphone's display onto a dashboard, but it added Cortana as a co-driver.
Over the past year, automakers have unveiled new cars equipped with CarPlay and Android Auto. Ferrari's FF became the first CarPlay vehicle last September, and Hyundai's 2015 Sonata will feature CarPlay and Android Auto connectivity later this year.
However, we've heard nothing new about Windows In The Car. The closest Windows Phone users can get to that experience is synchronizing Cortana to an infotainment system with Bluetooth. Is Microsoft surrendering this market to Apple and Google, or will it launch a new version of Windows In The Car with Windows 10 later this year?
The business of connected cars
By 2020, 90% of cars worldwide will be connected to the Internet, according to Telefonica. The most popular OS for connected cars is BlackBerry's (NYSE:BB) QNX, an embedded OS that powers as much as 70% of connected vehicles worldwide. The remaining vehicles mostly run on Microsoft's Windows Embedded Automotive.
Auto manufacturers design their own infotainment operating systems that run on top of QNX or Windows Embedded. Apple's CarPlay and Android Auto also run on top of QNX. Therefore, CarPlay and Android Auto aren't technically operating systems -- they're simply driver-facing apps that "hook" onto QNX to mirror a smartphone's display onto the dashboard.
Overlapping communication standards
Meanwhile, there are three main communication standards for mirroring phone displays onto a QNX or Windows-powered infotainment system. Microsoft backs MirrorLink, a universal mirroring standard for Android, Windows Phone, and BlackBerry devices. iOS devices are not compatible. MirrorLink backers belong to a group of companies known as the Car Connectivity Consortium (CCC).
Meanwhile, Google and Apple established more exclusionary standards of their own. Google established the Open Automotive Alliance (OAA) for Android Auto, while Apple made CarPlay exclusive to iOS devices. Because of Google and Apple's near duopoly in the smartphone market, OAA and CarPlay became more popular, although many automakers support all three standards.
So, where does that leave Microsoft?
When Microsoft unveiled the concept for Windows In The Car, there were two big problems. First, it ran on MirrorLink, a standard that was losing ground to OAA and CarPlay. Second, the platform presumably ran on top of Windows Embedded, which was losing ground to QNX. Ford notably replaced Windows Embedded with QNX in its Ford and Lincoln vehicles last year in response to reports of software crashes.
Therefore, for Microsoft to make progress against Android Auto and CarPlay, it would have to launch a more universal solution compatible with QNX and OAA standards. This would make it easier for automakers to add Windows Phone compatibility as a third mirroring option.
It's about ecosystem growth
The in-car infotainment market could grow at a CAGR of 12.1% to $14.4 billion between 2011 and 2016, according to research company Markets and Markets. However, most of that revenue will go to hardware and software companies like Pioneer, Alpine, Intel, and Nuance Communications.
For Microsoft, Google, and Apple, expanding into the connected car market is all about ecosystem growth. All three companies intend to tether their mobile devices to the larger Internet of Things (IoT) market, which consists of connected cars, smart homes, and wearable devices. For example, data gathered from a user's travel habits could prove useful for crafting targeted ads.
In my opinion, Microsoft put Windows In The Car on the back burner because of the upcoming launch of Windows 10. Since Windows 10 can be scaled up and down across phones, tablets, and PCs, it might be more effectively mirrored to a dashboard than the conceptual version.
The connected road ahead
As CarPlay and Android Auto reach more cars later this year, Windows Phone users could be left out in the cold. That would just be another reason -- in addition to a lack of NFC mobile payment solutions and compatible smartwatches -- to avoid Windows Phones altogether.