By Doug Newcomb

Ford's Microsoft-powered Sync system has been a huge hit with car buyers and the one bit of sunshine in the Blue Oval’s gloomy outlook. But with the automaker's exclusive deal with Microsoft winding down, the software giant has signed a deal with Hyundai and Kia to provide its vehicles with the hands-free navigation, communication and entertainment system.

The Microsoft-Ford marriage ends in November, which is about the same time the Korean automaker will offer Microsoft Auto in its vehicles worldwide. The crew in Redmond says upcoming versions of Sync will add navigation and emergency response to exclusive features Ford now offers, such as text messaging and wireless streaming of Internet radio from Web-enabled phones.

Martin Thall, general manager of Microsoft's automotive business unit, told the Detroit Free Press the latest version of Microsoft Auto, the operating system Sync is build upon, soon will be available for "general release to the automotive community.”

What's that mean?

Thall said the latest version of OS is being deliverred to some suppliers and an official launch is planned later this month in He expects suppliers already familiar with Microsoft Auto, such as Continental and Alpine, will tweak the operating system to develop innovative features that can be sold to automakers.

Steve Koenig, the Consumer Electronics Association’s director of industry analysis, says "demand is omnipresent" for the kind of features offered by Microsoft Auto, and he predicts the technology will be ubiquitous within two or three years.

"We see demand … across all income levels, all age levels," Koenig said. "It's really resonating with consumers' digital lifestyle. We're starting to see consumers beginning to demand it and expect it."

Consumer spending on in-car consumer electronics grew 21.5% in

2007 to $11.4 billion, according to a CEA

study. The study cites Sync as a turning point for such technology because it is based on software that is easily updated, so the auto industry's can more easily keep pace with changes in consumer electronics. Automakers are no longer hamstrung by the four- to five-year development cycles that dominate the industry.

It isn't clear yet just what the second-gen Sync will look like, but

Microsoft says the Hyundai-Kia deal will deliver "a next-generation infotainment system" to the North American market in 2010 and future technology will be similar to a "mini-PC.” Microsoft Auto senior product manager Velle Kolde says the companies are developing features that won't be ready until fall and suggested they could include navigation and emergency response services similar to those offered by OnStar - two chinks in Sync’s armor.

"What specific features you see will be tailored toward the types of vehicles they go into," Kolde says, adding that Hyundai and Kia will adapt features to the needs of customers in countries where their cars are sold.

In addition to the Ford deal, Microsoft formed a partnership with

Italian automaker Fiat to launch the Sync-lite Blue&Me system in

2006. Pundits have predicted Microsoft's influence will dwindle in the computing world, but clearly the company is taking its show on the road and wants to dominate the dashboard. "Microsoft is certainly raising their level of involvement and their competitiveness in the automotive industry,” Phil Magney, an analyst at the Telematics

Research Group told the New York Times. “It makes it one of the top operating systems that automakers must consider in developing their

‘infotainment’ systems.”

Photo by Doug Newcomb / wired.com