Cars Are Another Market Where Windows Suddenly Can't Compete Atomic Taco -

Cars Are Another Market Where Windows Suddenly Can't Compete

It doesn't always pay to be first

With the announcement earlier this week that Ferrari, Mercedes-Benz, and Volvo will ship new vehicles utilizing Apple's CarPlay system this calendar year, it's not hard to stack up the various in-dash entertainment and communications options and come to an obvious conclusion: Microsoft's Windows-based solutions, despite being in market the longest, are being quickly eclipsed by newer alternatives.

No, it's not the most dramatic fall for the software giant: A 10 percent decline in the PC market last year, with an expected 6-8 percent drop again this year, has pretty much evaporated any notion that the core market for Windows will reach its peak volume again. But with automobiles, we see another industry in which Windows—in this case, Windows Automotive—is no longer competitive. And it's getting worse.

Ralated: "Apple Rolls Out CarPlay Platform for Automobiles"

Microsoft could once point to high-profile wins with Fiat, Ford, Kia, and other automakers. But Ford admitted late last month that it is abandoning Windows in favor of a QNX-based platform that has become a sort of de facto standard for in-car technologies. And Kia? Despite Microsoft's development of a unique Ford Sync-like system for that company's automobiles, Kia dropped Windows already and is now working with an Android-based system.

Aside from QNX—itself owned by failing smartphone maker BlackBerry—the two up-and-comers in the automotive technology market mirror those in smartphones and tablets: Google Android and Apple iOS. And increasingly, it is these three players that seem to matter most.

The appeal of Android and iOS is pretty obvious, as most car customers already own a smartphone running those systems, and integrating them with whatever options are available in the vehicle is a key request. What's interesting is that they're not always mutually exclusive. That is, few carmakers would likely choose to only use Android or iOS or QNX. Some will use two or more together, and others will combine one of those systems with a variety of other options.

(One of the many available options, interestingly, is Nokia's HERE mapping and location technology, which will be retained by that firm should the sale of its handset and devices business to Microsoft finally be consummated.)

Some of the rationale for that strategy is simple customer satisfaction: Since there's no way to know what devices their customers will use over time, it's important to specifically support as many popular handset platforms as possible, and more generally support others through standard Bluetooth and USB connectivity. But carmakers are also concerned with handing over the keys, so to speak, to outside companies. As with cable companies and others with direct customer relationships, carmakers are not interested in letting Apple, Google, or other technology providers get between them and those customers.

So while Apple's CarPlay system is elegant and requires only the most modern iPhone handsets—a typically aggressive strategy the company employs to keep its loyal customers upgrading—no car maker will only provide this one system in their vehicles. Instead, CarPlay will be an option that appears only for owners of new iPhones, while other customers will see various other options, depending on the vehicle.

For Microsoft—which entered the automobile technology market way back in 1998, about 15 years before Apple or Google—its diminished stature here is sadly familiar. And if this market evolves like those for smartphones and tablets, the firm might soon find itself on the outside looking in. And its only recourse at that point will be to provide its apps and services on other platforms. That's not necessarily a horrible outcome, but it's a tough cultural change for a company that prides itself on platform creation.

It's a change the firm will need to get used to, of course. And to be fair, Microsoft's "devices and services" mantra was always intended to be inclusive of other firm's devices and services. But with these losses stacking up—in addition to the personal computing market, the Xbox One appears to be ceding the living room to Sony's PlayStation 4 and cheaper entertainment options like Roku—Microsoft could really use a platform win.

Related: "Ford Drives Into the Cloud"

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