Microsoft Corporation and South Korean carmaker Hyundai Motor Co have agreed to build a music and information system to debut in cars sold in North America in 2010. The companies did not reveal financial terms of the joint venture.
Microsoft and Hyundai Motor Group will invest $113 million and $166 million, respectively, in the `Automotive IT Innovation Center' they will set up jointly, South Korea's presidential Blue House said.
Microsoft chairman Bill Gates is visiting Seoul to sign the agreement with Hyundai. Gates also met South Korean President Lee Myung-bak to discuss cooperation with South Korean companies.
The joint venture will develop a version of its Windows Automotive software for the Hyundai Kia Automotive Group, the world's fifth-largest automaker.
Microsoft already has a deal with the Ford Motor Company for its Sync system, which uses voice activation technology to operate cellphones and play digital music.
With both Ford and Hyundai as customers, Microsoft's software could potentially be put into more than eight million vehicles worldwide each year.
Its competitors include OnStar from General Motors, Johnson Controls and QNX Software Systems from Harman International.
Systems based on Microsoft Automotive are available in Fiat Group vehicles in Europe and South America, as well as in 12 Ford models in North America.
Windows Automotive will first appear in Hyundai vehicles in North America in 2010, said Martin Thall, general manager of Microsoft's automotive business unit. Subsequent versions will give drivers voice control over navigation systems and video entertainment, in addition to cellphones and digital music players.
The first product under the partnership would be a voice-controlled system linking mobile devices to car stereo systems. Later versions are expected to include multimedia and navigation-related features, the companies said.
The deal will add a new competitor to Ford Motor Co's Sync system, which allows a driver to use voice commands to control a system linking the car's audio system with a mobile phone and the iPod from Apple Inc.
The market for car-based information and data systems is expected to grow sharply in coming years, and automakers such as BMW AG and Chrysler LLC have projects in the works to bring regular iInternet access to vehicles.
Microsoft also agreed to invest in a gaming support centre in South Korea, which will help small companies gain access to global gaming markets.
Microsoft will invest $23 million in the gaming project, according to the Blue House. It said Microsoft's investment in South Korean automotive IT, game and education industries would reach a total of $147 million in the next five years.