CONTINENTAL AG, A PARTNER WITH FORD Motor Co. and Microsoft Corp. for the collaborative development of an in-vehicle multimedia system dubbed Sync, says it plans to offer similar systems to other auto makers as industry interest in in-vehicle telematics heats up.

The safety/security and entertainment telematics being developed or utilized by Ford, General Motors Corp.'s OnStar, Mercedes-Benz and BMW AG is prompting competitors to evaluate their own strategies, says Brian Droessler, director North America customer centers, Continental Automotive.

“By the 2010-2012 timeframe, hands-free and audio-streaming capability are going to be in high demand,” he says.

A recent study conducted by the Telematics Research Group Inc. reinforces Droessler's claim.

Called “Sneak Peak: Connectivity a ‘Must Have’ for Model Year 2008,” the survey of 100 '08 models for the North American market finds nearly 70% will offer a voice-activated Bluetooth interface for hands-free phone operation.

“Hands-free phone operation with voice recognition is becoming a must-have in all segments of the auto industry,” says Phil Magney, co-founder and principal analyst at TRG.

The study also found 80% of '08 models will offer navigation as standard or optional equipment; auxiliary input ports and flash memory interfaces will be available on most vehicles; and USB ports will be offered on nearly 20% of the new models, up sharply from '07.

Devices that can transmit information and music to a vehicle via a wireless Bluetooth connection or USB port are not just of interest to younger consumers, although certain features may attract some age groups more than others, Magney tells Ward's.

“It's probably safe to assume a B-class vehicle would appeal to a younger demographic, and (such buyers) may be more interested in an iPod interface than someone in a high-end luxury sedan,” he says. “But (telematics) span all segments.”

Magney dismisses the argument Baby Boomers are more intimidated by technology than younger generations. “I find that argument weak,” he says, noting high-end vehicles have had embedded telematics for years that have been used successfully by older consumers.

However, auto makers may rush some technology to market to appeal to a certain demographic, he says, noting within the next few years all vehicles will offer MP3 and hands-free cell-phone capability.

Microsoft and Continental are betting that Magney's predictions are on the mark. Sync is just the first offering resulting from their collaboration. The system is based on Microsoft Auto software, which has been integrated into Continental's telematics gateway.

While Ford has worked with both companies on the development of Sync, Microsoft and Continental plan to offer similar systems to other auto makers, Droessler says.

Contracts already have been signed with several OEMs, he says, declining to reveal their identity.

“The plan is to work with Microsoft to take the operating system, hardware and reference design to other customers once it is generally available,” he says, likely early next year.

Future versions could include imbedded cell-phone technology, eliminating the need for drivers to carry phones in their vehicles, Droessler says. In-vehicle streaming video also is in the works from cell-phone providers AT&T and Verizon Communications Inc.

Another future application will allow users to access audio and visual information from home multi-media equipment via an over-the-counter component called Slingbox, which can transmit files from the Internet to a hand-held device.