Microsoft Boosts Effort to Get into the Connected Cars Space with Patent Licensing

The connected car market is expected to grow from 5,1 million units in 2015 to 37,7 million units by 2022, according to a recent report.

The market is growing ten times faster than the overall car market, and connected car hardware and software are estimated to bring in $152 Billions in 2020.

All these stats mean one thing: connected cars are an opportunity for companies to make a lot of money in the autonomous driving market.

So it’s no surprise tech companies are eager to benefit from this opportunity and become key providers of connected-car technology.

One way Microsoft aims to step up its game and get ahead of the competition is by joining forces with a major Japanese automotive manufacturer.

At the end of March, Microsoft officially announced a new patent license agreement with  Toyota.

According to the official press release, the agreement includes broad coverage for connected car technologies.

But does Microsoft have any chance of matching up the efforts of some of its main competitors, such as Google, Apple or Pandora?

Read on to learn more about Microsoft’s big move in the connected car space, and what it could mean for the future of the company. 

A Few Words about Microsoft’s Clever Approach of the Market

Unlike industry big players like Google or Apple, Microsoft’s plan to get in on the action doesn’t involve building its own high-tech cars.

Instead, the company focuses on developing the tech needed to power the cars of the future and support carmakers on their journey to build smarter automobiles.

So Microsoft’s plan is that of becoming a connected car enabler, not a developer.

And for that, they are “working closely with today’s car companies to help them meet customer demands,” as Erich Andersen, corporate vice president and chief IP counsel of Microsoft’s Intellectual Property Group, stated.

It’s easy to assume that Microsoft’s goal is to enter a series of such agreements.

Toyota is the first automaker to take the deal. We’ll talk more about this in the following lines.

Microsoft’s Patent Licensing Deal with Toyota in a Nutshell

Microsoft’s agreement with Toyota – the first of its kind – revolves around the licensing of its patented technology to the automaker.

Microsoft’s new auto licensing program includes:

  • access to navigation
  • predictive maintenance
  • entertainment
  • voice recognition
  • tools to store and transfer files
  • cybersecurity.

The agreement with Toyota covers intellectual property linked to information processing technology and communication technology used in connected cars.

But that’s all Microsoft is willing to disclose when it comes to the terms of the deal.

Toyota isn’t saying much about how exactly they plan on using the technology in the near future either.

So there’s a high chance Totoya isn’t going to make use of the patents exclusively to develop connected cars.

There’s no comment as far as the fees that Toyota is paying to use Microsoft’s connected car patents.

The Company’s Previous Attempts with Connected Cars

Although it’s a notable endeavor, this is not Microsoft’s first attempt to get into connected vehicles. Microsoft has been touting its cloud computing platform Azure to automakers long before.

 Here are a few events in Microsoft history worth mentioning here:

  • The tech company has previously teamed up directly with major players in the auto industry like Ford, Kia, BMW, Nissan. They all used special versions of Windows for cars to create their own interfaces and systems.

What Is Your Take on This?

Will Microsoft’s new agreement with Toyota manage to boost the company’s efforts to get more enterprises to use its technology for connected cars?

Is this the first deal of a series of more to come? And where do you see this ambitious project heading in the future?

Make sure to share your thoughts on the subject in the comment section below and get the conversation going.

Philipp Kandal