Microsoft and Taiwan IT Partners Jointly Developing Auto Electronics

Microsoft Corp. recently announced an interest in cooperating with Taiwan software and hardware enterprises on auto-use computer technology. According to industry sources, the software giant has already sent missions to consult with leading information technology (IT) equipment manufacturers on the island, including Asustek Computer, Quanta Computer, and Wistron Corp.

All three local players have announced plans to enter the auto-electronics business since late last year, all motivated in large part by slowing in the global PC market, now widely seen by analysts to be in a mature stage. Microsoft, the world's No. 1 software developer, has been actively diversifying its business interests, and has to date established cooperation ties with over 25 international automakers.

Quanta, the world's largest contract notebook-PC producer, announced its plans in early April, stating at the time that it had engaged in a full year of evaluation before deciding to move forward. The company is taking aim at the in-car multimedia market by building on its established technical bases in the production of digital versatile-disc (DVD) players (with affiliated Quanta Storage Inc.) and thin film transistor-liquid crystal display (TFT-LCD) panels (with Quanta Display Inc.).

Asustek, the world's largest computer-motherboard maker and a leading notebook-PC supplier, also just recently unveiled its own aggressive plans, with Jonney Shih, the chairman, stating that the firm will pour substantial financial resources into the initiative, and Chief Technology Officer Lin Shao-chang stating that Asustek will make its new plant in Shanghai, mainland China, scheduled for inauguration in 2006, the group's "auto-electronics citadel."

Wistron has not announced a stand-alone project, instead evaluating how the development of its device-assembly business can be incorporated into related lines.

Windows Opens a Window

According to industry sources, Microsoft's representatives have discussed the use of the firm's proprietary software with the three Taiwan high-tech outfits. Windows Automotive, Windows CE, and Windows XP are to be embedded in road-vehicle computers. The software giant, in fact, established an automobile-business department in 1995 and has been actively engaged in various telematics (telecommunications and informatics) projects for automakers on an original-equipment manufacturing (OEM) basis.

A telematics system refers to a wireless communications system designed for the collection and dissemination of data. Applications include vehicle-based electronic systems: mobile telephony, vehicle tracking and positioning, on-line navigation and information services, and emergency assistance.

Last year, Microsoft announced that it had developed a telematics platform for Italian automaker Fiat, in cooperation with Xilinx, Samsung, ScanSoft, Siemens, and other leading high-tech names, each contributing its strengths--chipsets, processors, telecom modules, voice engines, hardware, and so on. The Redwood, Washington-based powerhouse has also provided telematics systems to BMW, Mercedes-Benz, Toyota, Honda, and Mitsubishi, among others.

Industry insiders state that Microsoft's intention to bring Taiwan companies into its telematics-solutions initiative will create significant opportunities for local IT companies in the auto-electronics business. The global original equipment (OE) market has long been dominated by tier-one suppliers such as Alpine, Bosch, and Siemens.

Long-Term Agreements

Eddie Wu, senior director for Microsoft's Embedded Systems Group in Asia, states that in addition to OEM projects with global automakers, Microsoft has cooperated with local partners in Taiwan on the development of added-value technology for automobiles, such as GPS technology that can be used by drivers on personal digital assistants (PDAs). He states that such joint initiatives may well prove the initial stage in technology platforms that could prove to have international appeal.

According to Wu, Microsoft's operating system for its Windows automotive cooperation ties with international automakers are based on long-term agreements extending anywhere from three to seven years. This is necessary, he adds, because the goal behind these joint efforts is the mapping out of the definitive blueprints for next-generation in-car computers, the result being Microsoft-associated brands recognized as the most effective in communicating and interacting with the world outside the car.

Microsoft's next-generation on-board auto computer is to feature enhanced multimedia-entertainment and voice-control functions integrated with personal communications devices. In future, the senior director says, passengers will find it a simple matter to establish wireless connections between their personal devices (such as cellphones and PDAs) and a vehicle's computer through a Bluetooth interface, enabling the checking of road conditions, info on local sites, vehicle positioning, weather information, and much more data of practical use. Voice-control capability will be incorporated so as to free a driver's hands, enhancing driving safety and convenience. The upgraded multimedia-entertainment systems will enable the playing of personal-choice music and movie files through USB connectors.