FRANKFURT (Reuters) - Microsoft and Siemens will join forces to develop in-car entertainment and navigation products that should make it easier for consumers to connect devices such mobile phones and music players.

The two companies said on Friday the first Siemens products based on Microsoft software should go into production in 2009.

The market for automotive infotainment products is set to grow to about $54 billion by 2012 from $38 billion currently, according to research group iSuppli.

The rise of portable media players and content downloadable from the Internet is forcing carmakers and their suppliers to rethink their offerings, which have until recently centered on standalone audio systems.

Siemens automotive unit VDO, which is being bought by car-parts maker Continental for 11.4 billion euros ($15.6 billion), said using the Microsoft Auto platform would give it more room to concentrate on its core competencies.

Siemens VDO also makes driver-assistance and safety systems.

"In addition, Siemens VDO will also be able to actively help shape Microsoft Auto and license platform-compliant applications, such as navigation functions, for third-party suppliers," a joint statement from the two companies said.

The companies said their first milestone would be a multimedia platform that would make it possible to integrate consumer-electronic functions and portable devices.

"Consequently, new solutions in consumer electronics will be adapted for in-vehicle use more quickly and easily, since it will only be necessary to add individual software components," they said.

"This helps close the gap between the short development cycles in communications and information technology and the comparatively long product cycles in automotive engineering."
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