Q&A: Microsoft and Fiat Auto Partner for Major Telematics Deal

REDMOND, Wash., July 15, 2004 — Today, Microsoft’s Automotive Business Unit and European automaker Fiat Auto announced a long-term strategic partnership to design a high-quality, affordable telematics system for Fiat cars. The largest in-car computing deal in Microsoft’s eight-year automotive history, the partnership marks an important step in the evolution of the company’s work with automakers. For the first time, Microsoft will work directly with an OEM (original equipment manufacturer) for the development of a complete in-car computing solution while continuing to supply its core Windows Automotive operating system to the telematics industry worldwide.

Telematics technology, which connects cars and their occupants to off-board information services by means of wireless communication technologies and the Internet, is integrated into a growing number of cars on the road today. Imagine being able to listen to digital music from your Windows Mobile device or media player, knowing the traffic conditions ahead, or pulling into a gas station with the lowest prices in town — every time. This kind of telematics technology transforms the vehicle into a mobile extension of real life, not a cocoon that insulates drivers from the world around them.

As a result of their co-development efforts, Fiat and Microsoft plan to introduce the first vehicles with the new telematics system in 2005. Soon, more drivers and passengers will be able to experience hands-free calling, GPS navigation, in-car entertainment and enhanced diagnostics. In addition, Bluetooth connectivity and advanced speech technology will allow motorists to command the systems, as well as their phones and PDAs, hands-free using the power of their voice. Fiat Auto plans to integrate Microsoft’s Windows Automotive technology across all Fiat, Lancia and Alfa Romeo models.

PressPass spoke with Todd Warren , corporate vice president of Microsoft’s Devices, Services and eXperiences Group, which includes the Automotive Business Unit, to learn more about Microsoft’s history in telematics and get an inside look at how the partnership with Fiat signifies the beginning of a new era for the group.

PressPass: What is your vision for telematics?

Warren : Our vision is to help the automotive industry deliver to consumers in-car solutions that make their time on the road more efficient and enjoyable. In order to achieve this goal, the auto industry needs to be able to quickly and easily develop cost-effective in-car solutions — from entry-level devices to complex high-end systems — based on a standard platform.

We are developing systems that accomplish these goals. We are working to enable drivers and passengers to more safely communicate, get timely and relevant information as well as access digital music and other forms of entertainment at their convenience in the car.

PressPass: How does the telematics system being developed by Fiat and Microsoft differ from other in-car computing systems being offered by Fiat’s competitors?

Todd Warren, Corporate Vice President, Devices, Services and eXperiences Group.

Warren: A number of features differentiate our telematics system from the rest of the pack. The fact that the system will be based on our Windows Automotive software platform and standardized across a number of Fiat’s vehicle lines means that it’s more affordable to develop, translating into cost savings for the manufacturer and end customer. In addition, the technology allows for remote upgrades to keep up with ever-changing technology trends. Finally, the Fiat systems will feature Bluetooth connectivity to mobile devices such as PDAs and Smartphones and a USB port for connection to digital music files so drivers and passengers can more safely and easily integrate their devices into their car.

As a result of our joint efforts, Fiat customers will get a high-quality telematics solution at a much more affordable cost than systems on the market today.

PressPass: Why did you choose to work with Fiat for this project? Why did Fiat choose Microsoft?

Warren: Fiat has more than 100 years of automotive technology expertise, and recognized the benefits of integrating a standard telematics system across its car models. We were able to offer Fiat deep expertise in developing flexible, scalable software platforms that would allow us to create affordable, standardized telematics solutions. We came together with the shared goal of making driving a safer and more enjoyable experience, and we are excited to begin working with Fiat to make this goal a reality for their customers

PressPass: Where else can you find Microsoft technology in the automotive industry?

Warren: Our Windows Automotive-powered technology is enabling the in-car computing scenarios in 23 pre-installed and aftermarket devices from 12 world class automakers and suppliers, including the 2004 Mercedes S-Class, BMW’s 7 Series, Fiat’s Lancia Thesis, 2003 and 2004 Honda Accord and Volvo’s 2002 S60, S80, V70, XC 90 and Cross Country models.

However, our partnership with Fiat is unique in that it will be the first time we are working directly with an automaker to co-develop a complete telematics solution.

PressPass: Doesn’t all of this technology contribute to driver distraction?

Warren: We share the automotive industry’s commitment to making driving a more enjoyable, safer experience. Research shows that more than 85 percent of cellphone users and 50 percent of PDA users use their devices in the car. Like our Voice Command product for Windows Mobile-based Pocket PCs, the Fiat systems includes advanced speech technology to help consumers more safely operate the devices, as well as other system features, using voice commands. Bluetooth data connections with mobile devices also contribute to a fully integrated driving environment. By providing hands-free access to the telematics system, we are helping make it easier for drivers to keep their hands on the wheel and eyes on the road.

PressPass: Since technology advances happen rapidly, aren’t you concerned that Fiat customers will purchase a car that will have a telematics system that is out of date in only a few years?

Warren: No. The underlying Windows Automotive software platform that we are using in the Fiat system is highly scalable and customizable so we will be able to help Fiat add or replace features and functionality very easily in future car models. In addition, the system connects to remote diagnostics and provides access to some vehicle functions, allowing us to update the customers’ software systems as needed in a very cost-effective and convenient manner.

PressPass: What does this announcement mean for Microsoft’s future work with automakers in developing telematics systems?

Warren: We will always be committed to developing the best possible software solutions for the car. One of our core goals for the automotive industry is to work closely together with partners, whether directly with an automaker or within the supplier community, to develop affordable telematics systems that are easy to use.

Our partnership with Fiat is a testament to our commitment to this goal, and we look forward to working with the industry to continue to create technology that best fits their customer’s needs.

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