Auto OEMs Dial-Up 'Infotainment' Connection

OEMs began making broad promises about a new age in communications and data applications for cars over a decade ago. But aside from in-car technologies that a few luxury-brand automakers offer, the vast majority of models remain devoid of anything resembling the pie-in-the-sky apps most cars were supposed to have by now.

However, Ford, Toyota, and likely other automakers in the near future, are doing something different: They are turning more to the power of smartphones for emerging in-car communications and 'infotainment' apps.

Instead of competing against OEMs that offer after-market devices for cars, Ford and Toyota are developing relatively inexpensive dashboard consoles with voice-activated and touchpad consoles that will increasingly serve as hands-free extensions of Androids, Blackberrys, and iPhones.

While automakers have offered the possibility to wirelessly port some data from smartphones to cars for years, the applications largely remain in the realm of luxury models and are expensive. Instead, Ford's Sync allows users to port applications from smartphones to a dashboard console that costs just a few hundred dollars as an option. The idea is that you port your music and other apps with you on your phone and then use voice-activated commands to manage them on your car's screen.

At the Consumer Electronics Show in Las Vegas earlier this month, Ford also announced MyFord Mobile, an application that will complement Sync but is largely geared for its upcoming Focus Electric that indicates battery status and nearby charging stations for electric cars.

Toyota demonstrated its Entune infotainment system at CES, which in basic functionality is like Ford's Sync, complete with voice-activated commands and the ability to port smartphone apps to the car's console. Toyota will also offer Safety Connect so drivers can receive real-time traffic info.

However, the smartphone-centric strategy has yet to take hold among most of the world’s mainstream carmakers. General Motors , for example, continues to push its OnStar system. Instead of letting the driver bring applications to the car with an iPhone or another smartphone, GM continues to invest in a computer system that remains in the car. But will GM's OnStar system remain an incongruity vis-à-vis Ford and Toyota, or will the auto giant eventually begin to allow drivers to port their favorite smartphone apps to GM car consoles?

Luxury car makers, of course, have traditionally dominated next-generation telematics apps by offering advanced, albeit expensive, infotainment applications. BMW, for example, unveiled a working prototype a few years ago of an in-car IP-based system able to stream data back and forth from smartphones and desktop PCs with either a cellular or a WiFi link. However, the application has not yet come to market.

Audi is reportedly working with Nvidia Corp. (Nasdaq: NVDA) to develop a graphically intensive console for navigation and other apps. Mercedes and BMW are developing IP-based in-car communication systems that will warn drivers of upcoming accidents and other road hazards in real time (the exact launch dates of these applications have not yet been disclosed).

However, the perennial problem for automakers that offer advanced in-car technologies as options is the long development cycles of three or more years for in-car technologies. The latest-and-greatest car technology today is very often not-so-new when it sees launch three years later. This is especially problematic for the luxury-brand carmakers that try to remain ahead of the after-market technology curve to justify their premium-brand prices. Paying well over $1,000 for Mercedes' installed GPS system was not very enticing when it was twice as cheap to buy the latest Navman after-market device just a few years ago.

So what are OEMs to do? With the explosion of smartphones that offer processing and graphics power and 3G connectivity, most automakers may follow Ford’s and Toyota’s lead by letting the smartphone developers figure out what works best for car "infotainment."