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NINETY EIGHT REGENCY

Car companies race to innovate

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Car companies race to innovate

Ryan Flinn / Bloomberg News

When Ford Motor Co. came to Noah Shanok's San Francisco startup about using his technology, he expected it to be like meeting strangers from another planet.

"We thought we might have been like aliens," said Shanok, the 35-year-old chief executive officer of Stitcher, whose software lets users collect talk-radio programs on one custom channel.

"It became quickly clear when talking to the leadership at Ford that we were smart people looking at problems together."

The meeting, which led Ford to add Stitcher to its voice-activated Sync entertainment system, typifies Detroit automakers' new approach to technology.

Ford, Chrysler Group LLC and other car companies are counting on Silicon Valley to help boost sales and shake off their image as slow adopters of innovations. That means working with startups on iPhone-style apps, adding staff in the Bay Area, and giving drivers freer range over the software and hardware that go into their cars.

"The three biggest sellers of vehicles in the U.S. -- General Motors Co., Ford and Toyota Motor Corp. -- are all banking on so-called infotainment technology to help them gain market share," said Jim Hall, principal with consulting firm 2953 Analytics Inc. in Birmingham.

Ford has been selling Sync for three years, but the company stepped up its focus on technology as it tried to pull out of the recession. Ford buyers cited the Sync system as critical to their purchase 32 percent of the time, the company said in January. The technology, available as a $395 option on some models, also helps make cars more profitable. It's standard on higher-end vehicles.

"The winner on this ain't known yet," Hall said. "The company that can accommodate as many different mobile devices as possible, and integrate them in the car -- they're the guys who are going to win long-term. But it's a very difficult job.

It's harder for automakers to take risks with car software than with smart phone apps, because people keep their vehicles longer -- and their lives depend on them. Infotainment technology lets customers use social networking, search for businesses and access the Internet, and yet avoid distracting drivers.

"Do you think Apple cares if your iPod works four years after you buy it?" Hall said. "With a car, you have to."

Doug VanDagens, director of Ford's Connected Services Solutions, said: "Ford has been touting its new technology features in commercials, showing drivers customizing touch-screen buttons to get directions, portable music and text messages. Getting to this point took the company at least a decade.

"We had all kinds of stodgy and frumpy management. At best, we were a fast follower with regard to technology."

Now, the company's executives fly out to Silicon Valley monthly to meet with startups and software developers. Ford is working directly with companies such as Stitcher, TeleNav, Oakland-based Pandora Media Inc. and Emeryville-based Gracenote, while inviting others to its developer network site for instructions on how to make an app work with Sync.

The infotainment trend may face challenges from groups such as the National Safety Council, which is concerned it will distract drivers. Activities that take a driver's concentration off the road aren't something manufacturers should encourage, said Dave Teater, a senior director at the council.

"Any automaker who's making it easier for the driver to do those things is probably doing a disservice to the driver, and the rest of the motoring public," said Teater, whose 12-year- old son died after a car crash with a driver using a mobile phone.

Ford's Sync system is less distracting than what drivers already do in the car, the company said. It relies on hands-free, voice-activated technology to ensure that drivers don't lose concentration.

Ford wasn't first to cozy up with Silicon Valley. BMW AG established its Technology Office in Palo Alto more than a decade ago. The lab works on improving the interface between humans and cars, as well as infotainment and driver-assistance technology.

Volkswagen AG opened a research lab in the area in 1998 and is working on such innovations as autonomous driving -- the idea of a car navigating itself.

"We're here to bridge the two different worlds," said Chuhee Lee, head of infotainment for Volkswagen's Electronics Research Lab in Palo Alto. "They expect us to surprise them."

Chrysler worked with San Francisco-based Autonet Mobile Inc. to put Wi-Fi technology inside vehicles. The Auburn Hills-based automaker also is using Qualcomm Inc.'s Flo TV to provide live television.

From The Detroit News: http://detnews.com/article/20100909/AUTO01/9090356/1148/auto01/Car-companies-race-to-innovate#ixzz0z2QdbBX6

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