Microsoft exec rejects OnStar-style subscriptions

DETROIT — After its success with Ford Motor Co.'s Sync voice-operated entertainment and phone service, Microsoft Corp. is hunting for another "killer application" for vehicles. One executive says the key may lie in the navigation screen.

Marty Thall, general manager of the software company's automotive business unit, said the next big thing could be a telematics system that is well-integrated into the vehicle and brings together navigation, traffic information and local search functions.

Thall told Automotive News that to gain wider market acceptance, telematics products must be available without a subscription. Also, he said, they must be relevant to consumers on a daily basis and not services used rarely if at all, such as a stolen-vehicle recovery.

Thall rejects the OnStar business model in which the equipment is installed and car buyers are asked to subscribe to use it. Instead, he would ask the automaker to build the cost into the price of the car, as Ford does with Sync, or he would fund it through advertising.

Say a driver asks the navigation system to suggest Italian restaurants along the route to her destination. A list of restaurants would pop up on the screen.

Topping the list would be those that had paid for the privilege, just as enterprises pay Google to be at the top of keyword searches.

"The idea would be to create experiences that are more relevant on a regular basis than, say, just pure safety and security or even vehicle diagnostics," Thall said. "Those aren't as relevant to consumers. They don't really want to pay for those," he said, even though "they want the benefits."

A few services that send real-time weather, traffic and other data to navigation screens through satellite radio networks are available today. But Thall envisions making such services available to a broader market, including low-cost vehicles.

"That's what we've done with Sync," he said.

Thall said the market for such integrated navigation products will grow in the next three or four years, as navigation screens and data become more affordable and widespread.

Ford's exclusive contract to develop applications using Microsoft Auto 3.0 for Sync expires at the end of 2008. Microsoft plans to make generic versions of the software available to Tier 1 suppliers to create additional applications for other automakers.

Thall said new applications could emerge in the 2010 model year. Microsoft's role then will shift from that of a Tier 1 supplier working directly with automakers to develop technology to that of a Tier 2 supplier providing the base software used by other companies to build applications.

You can reach Leslie J. Allen at lallen@crain.com

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