Microsoft at a crossroads in the automotive tech market

The company is likely to start losing its foothold in the in-vehicle infotainment business, but it may have a future in providing cloud-based services to carmakers.

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Automobile infotainment technology has undergone a major transformation in the past couple of years, as carmakers have moved away from proprietary software to open-source systems or more mobile-friendly platforms.

Microsoft had established itself early on as a leader in the in-vehicle infotainment (IVI) market, inking long-term contracts with major automakers like Ford, which has been using Microsoft's Windows Embedded Automotive platform in its Sync system since 2007.

Formerly known as Windows CE for Automotive, the Windows Embedded Automotive platform has run a strong second to BlackBerry's QNX operating system for years, but that's coming to an end.

Downturn ahead

Microsoft's share of the IVI market is expected to peak next year and then begin a steady decline. That outlook is based partly on the fact that many of the company's contracts will start to lapse. But a larger factor may be the automotive industry's shift away from proprietary systems.

Microsoft has had no new contracts for some time, said Egil Juliussen, an automotive analyst at IHS Technology. Last year, Ford announced that it would be dropping Microsoft in favor of QNX, saying it wants a more mobile-friendly IVI. Ford models with QNX-based systems are set to begin shipping later this summer.

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