Ford and Microsoft launch car software system

LAS VEGAS, Jan 6 (Reuters) Ford Motor Co unveiled on Saturday a new entertainment and communication system running on software from Microsoft Corp. that aims to bring the connectivity of a computer to the car.

The ''Sync'' system allows drivers to make hands-free phone calls, listen to music on digital media players, including Apple Computer Inc.'s iPod, and have cell phone text messages read aloud.

Ford and Microsoft announced Sync on the eve of the Consumer Electronics Show in Las Vegas and the North American International Auto Show in Detroit.

Microsoft wouldn't say if it planned to pitch Sync to other auto makers, but Velle Kolde, a senior product manager, said the company saw an opportunity to put its software in more than 600 million cars worldwide.

Computer systems for cars represents a potentially lucrative opportunity for the world's largest software maker as it looks to branch out from its core computer business.

''Microsoft certainly has its eyes on that market,'' said Gartner analyst David Smith. ''It's going to be an area of growth.'' Auto makers increasingly look to fancy electronics to differentiate their models from those of rivals but Ford, facing falling market share and hefty restructuring costs, has lagged others in integrating popular gadgets with in-car audio.

It said it planned to offer Sync as a factory-installed feature on 12 of its 2008 models and the product would in the future be available in all Ford, Lincoln and Mercury models.

''Sync is what today's generation and today's drivers demand in connectivity,'' Derrick Kuzak, group vice president at Ford, said in a statement.

Using Bluetooth wireless technology, the Sync system will allow users to operate mobile phones through voice commands or controls on their steering wheel.

It comes with a jack to allow most digital music players and storage devices to play music, with the controls being operated through the car radio.

When reading aloud text messages, Sync can translate commonly used expressions like ''LOL'' (laugh out loud) or the smiley face icon.

Ford's deal with Microsoft comes as the No. 2 U.S. auto maker is struggling to stem a slide in U.S. market share. Ford's U.S. sales slipped 13 percent in December and 8 percent for 2006.

The company is in a precarious position financially. It lost billion in the first nine months of last year with further losses forecast in the just-completed quarter and beyond.

Many auto makers already offer cars with plug-ins for an iPod and other MP3 music players and integration with Bluetooth technology for hands-free calling and Microsoft has also developed an onboard information and communication system for Italian car maker Fiat SpA.

REUTERS PKS ND1336