Today, Microsoft's Automotive Business Unit and European automaker Fiat Auto announced a long-term strategic partnership to design a high-quality, affordable telematics system for Fiat cars. The largest in-car computing deal in Microsoft's eight-year automotive history, the partnership marks an important step in the evolution of the company's work with automakers. For the first time, Microsoft will work directly with an OEM (original equipment manufacturer) for the development of a complete in-car computing solution while continuing to supply its core Windows Automotive operating system to the telematics industry worldwide.

Telematics technology, which connects cars and their occupants to off-board information services by means of wireless communication technologies and the Internet, is integrated into a growing number of cars on the road today. Imagine being able to listen to digital music from your Windows Mobile device or media player, knowing the traffic conditions ahead, or pulling into a gas station with the lowest prices in town -- every time. This kind of telematics technology transforms the vehicle into a mobile extension of real life, not a cocoon that insulates drivers from the world around them.

As a result of their co-development efforts, Fiat and Microsoft plan to introduce the first vehicles with the new telematics system in 2005. Soon, more drivers and passengers will be able to experience hands-free calling, GPS navigation, in-car entertainment and enhanced diagnostics. In addition, Bluetooth connectivity and advanced speech technology will allow motorists to command the systems, as well as their phones and PDAs, hands-free using the power of their voice. Fiat Auto plans to integrate Microsoft's Windows Automotive technology across all Fiat, Lancia and Alfa Romeo models.

PressPass spoke with Todd Warren , corporate vice president of Microsoft's Devices, Services and eXperiences Group, which includes the Automotive Business Unit, to learn more about Microsoft's history in telematics and get an inside look at how the partnership with Fiat signifies the beginning of a new era for the group.