Microsoft Corp. and Hyundai-Kia Automotive Group have partnered together to build a music and information system to rival Ford Motor Co.'s SYNC system. The system is set to debut in cars sold in North America in 2010.

Hyundai is the first major Asian automaker to commit to using the Microsoft Auto platform with the goal of bringing these systems worldwide.

The infotainment systems will be a voice-controlled interface linking mobile devices to car stereo systems, with the ability for new functionality through software updates via the USB port - much like Ford SYNC. Later versions are expected to include multimedia and navigation-related features, said Microsoft/Hyundai.

Hyundai-Kia will first introduce vehicles in North America in 2010 and expand to the Asian and European regions shortly afterwards.

As I predicted, this is only the beginning. The product deal marks a win for Microsoft and you can bet that we will see more of these partnerships with other automakers in the future. Microsoft Auto systems - which are essentially mini-PCs - are currently available in Fiat in Europe and South America, and in Ford in North America.

With automakers like BMW and Chrysler working to bring Internet access to vehicles, the market for car-based information and data systems is expected grow rapidly in coming years, and Microsoft plans to be part of this movement.

According to FORTUNE, the upcoming 3G iPhone will be discounted by AT&T to bring the price of the device down to $200.

Citing a "person familiar with the strategy," AT&T is preparing to subsidize $200 of the cost of a new iPhone for customers who sign two-year contracts.

Additionally, they say the new iPhone will be 2.5mm thinner than the original and will have a built-in GPS chip for navigation and other location-based services.

The New York Times' Bits Blog sees several holes in this rumor, especially the claim that the subsidized iPhone would be offered in AT&T stores exclusively, and not Apple stores. Still, it's an inevitable part of Apple's strategy to drastically lower the iPhone's price to bring sales closer to critical mass, with or without any fabled "person" to provide the info.

[FORTUNE via Engadget Mobile]

ICO Global Communications will be launching its G1 satellite from Cape Canaveral today.

It's not only the largest satellite ever launched by an Atlas rocket, but the ICO G1 is one of the largest commercial satellites ever built and is specifically designed to deliver signals to mobile and portable devices.

If the launch is successful, ICO will be the first mobile satellite services provider to become operational, and the first to deploy DVB-SH (digital video broadcast - satellite-to-handheld) technology in the United States.

There will be a live webcast of the launch starting at 3:40pm ET - the launch window is from 4:12pm - 5:12pm EST - so check it out. If the launch slips, they'll start it up again tomorrow at around the same time.

Slacker has finalized publishing agreements with major music labels so it now "officially" has the content rights allowing users of its online service to transfer songs onto Slacker Portable Radio Players.

The publishing license agreements, which were completed prior to the availability of Slacker Portables, also enable Slacker Premium Service customers to transfer songs and replay them whenever they want.

EMI Music Publishing, Sony/ATV Music Publishing, Universal Music Publishing Group and Warner/Chappell Music are all working with Slacker radio. They even were kind enough to throw in some quotes for the press release, so you know they're especially happy about this deal. (And, I suppose, anything that helps chip away at Apple's digital music dominance will make the RIAA happy nowadays.)

Music social network Imeem has acquired Snocap, the struggling digital rights company founded by Napster creator Shawn Fanning.

Terms of the deal were not disclosed, though its believed to be less than $5 million. That's a ridiculous discount to the $25 million that investors (including Morgenthaler Ventures, WaldenVC, and Court Square Ventures) sunk into Snocap.

Imeem, which uses Snocap technology, is gaining the firm's content identification technology and a digital registry, as well as its COO. Snocap's CEO Rusty Rueff is moving on.

Snocap's technology matches digital music to its database of 7 million songs, which then lets Imeem figure out how to allocate portions of its advertising revenues to the music companies who own the copyrights to the songs.

Snocap has been on the chopping block for some time, so it's not necessarily indicative of a massive downward trend. But it's another example of how the business model for digital music - even those that are fairly useful - still has yet to be worked out. And why some of these artificially bloated VC-funded companies haven't quite figured out that whole "sustainable" piece yet.

I'm not saying that Internet Radio isn't a threat to the big-bad broadcast infrastructure. Of course it is, and a looming one at that. But many of these companies haven't quite discovered the business model yet.

And there's still plenty of opportunity to get in on the action.

[TechCrunch, paidContent]

When the FlyTunes service was first unveiled at CES, it had only 50 channels to offer users. Now, a few months later, FlyTunes has received an injection of new content bringing its number of channels to more than 160 channels consisting of new sports, talk, weather and a myriad of music genres.

The free service (which pre-loads Internet Radio content onto your iPhone or iPod Touch) now includes programming from Radio Paradise, SmoothJazz.com, RauteMusik.fm, and 53 music channels from 181.fm.

In the talk category, FlyTunes has added on NPR - yes, NPR - as well as sports content from TheScore.com, and even local weather in the top 15 U.S. markets.

FlyTunes says they've signed on "hundreds of thousands" of users since their January launch, and that the average FlyTunes iPhone user listens for about 8-hours per month. Not too shabby since they're still in their infancy. And now with the channel count rivaling that of either satellite radio service, iPhone/iPod owners have yet another reason why they don't need Sirius or XM.

[FlyTunes]

The rumors that MySpace is teaming up with the big labels are looking to be true. Reuters is reporting that MySpace will unveil a joint music venture with at least three major music companies within 5 days.

News Corp (which owns MySpace), Sony BMG, Universal Music Group, and Warner Music Group will each have a stake in the venture, say Reuters sources.

TechCrunch has confirmed through their own sources that MySpace has settled their lawsuit with Universal. Meanwhile, Silicon Alley Insider has more details in that Universal will receive "a 'huge' cash payment in return for settling the 2006 lawsuit, perhaps in the $100 million range."

"It's really creating a robust monetization component to MySpace and having a focused music effort that could be the MTV of a new generation," said a music industry executive to Reuters who asked not to be identified before the deal is formally announced.

MySpace to become the "new MTV"? As long as MySpace doesn't lose its way (like MTV did), this could pose to be a very significant development in the world of music discovery for future generations. It's up to the execs over at Sirius and XM (and the entire radio industry in general) to make sure they're part of that movement.

[Reuters, TechCrunch, SAI]

UPDATE: PaidContent has more details on the actual service:

• Downloads will be DRM-free
• Video/audio streaming will be ad-supported
• Store will include merchandise and ticketing
• With 30 million uniques monthly and 5 million bands on the site "we're not starting from scratch, it's a big heads start."
• Not just for major music companies, but will be ways for unsigned artists to sign on.
• There will be a mobile content solution as well. (important)
• Pricing? Competitive with iPod? MySpace knows they're playing to an iPod-dominated base. DeWolfe: "Our intent is to make this content very portable and to give our users access to the content in the format that they want. To whatever extent we can leverage our environment via iPods, we'll look to do that."

This is very significant in terms of music industry. Remember, this is a joint venture with the three largest record labels (and possibly soon to include EMI, that's up to EMI to decide apparently). Whatever opportunities the RIAA feels they missed out on with online music - be it the original Napster, or now Apple iTunes - they're going to want to make up ground a lot of lost ground. This will be their avenue.

The New York Post is reporting that Sony BMG and Warner Music Group are gearing up to sign an agreement with MySpace to launch its upcoming digital-music joint venture: MySpace Music.

The agreements could be signed as soon as this week. The service is expected to launch later this year. The labels don't want any upfront money either, they're instead trading content rights in exchange for minority equity stakes in MySpace Music and a revenue-share that News Corp. hopes to generate from the service.

"Everybody's operating with a sense of urgency to try to close it out," said one industry insider to The Post.

The business model? Ad-supported audio mixed with good ol' fashion pay-per-download music.

Silicon Alley Insider points out that the creation of MySpace Music would give the labels their own competitor to iTunes that they so desire. That, no doubt, adds to the "sense of urgency" as the music labels would prefer to control their own digital destiny, rather than have Apple dictate it to them.

"The concept of the joint venture is to bring in all forms of [making money from digital music] and much more tightly integrate them," said another person familiar with the negotiations.

[New York Post via Silicon Alley Insider]
Photo: MySpace CEO Chris DeWolfe and News Corp Chairman Rupert Murdoch speak at the Web 2.0 summit... caption contest anyone?

Remember when I said internet in your car may come sooner than you think? Well guess what, Chrysler is saying it will be the first car company to provide in-car Internet access - availability will come later this year.

The third-largest U.S. automaker will have the capability added to existing vehicles by dealers beginning this year, and later will be factory-installed on the assembly line.

The Washington Post is reporting that Chrysler will use a cellular signal and a mobile phone account to give passengers access to the web.

"We want to make the radio itself a WiFi port," said Frank Klegon, Chrysler's product development chief.

And this is just the beginning of Chrysler's connectivity plans. Hey DOJ, are you watching this?

[Washington Post via Autoblog, Engadget]

It looks like Americans are moving beyond using their cellphones just to talk, with non-voice functions gaining more and more usage, according to recent research released by eMarketer.

But what struck me as the most interesting was that "play music" came in at an incredible 17% total - that's nearly the same amount of mobile usage as using email, accessing the internet or recording a video.

Obviously the daily activity drops significantly from the total, but even then, mobile music has the same amount of daily usage as internet access.

Check out how this breaks down by age after the jump...