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General Motor’s OnStar, which provides navigation and assistance services to nearly 5 million subscribers, may soon get competition from Microsoft, reports Bloomberg.

Microsoft’s service, called Sync, would connect through a Bluetooth-enabled mobile phone and allow drivers to make calls or access music by voice request. The system, which has a small monitor in the dash, also can receive and “read” text messages from your cell phone aloud.

It will be a $395 option, reports the Washington Post, and eventually will be available on 12 Ford, Lincoln and Mercury models, the company said two weeks ago. It will challenge OnStar’s digital subscriber-based wireless system, which costs as much as $324 a year.

Microsoft’s voice-recognition system could be paired with Sync, which will be offered by Ford on its 2008 Ford Focus. Microsoft’s voice-recognition software would allow mobile telephone users to receive spoken data from Microsoft’s Tellme database. Microsoft obtained the technology when it acquired Tellme Networks in May.

GM’s OnStar is a subscription service that costs $17 to $27 a month. It provides live operators to help drivers with safety issues, directions and other services. The system also can diagnose mechanical problems. Onstar uses a mobile phone network (usually Verizon, Sprint, or AT&T in the United States), coupled with location information using GPS technology.

C/Net shows how Microsoft’s Sync works (video). NPR tested Voice Command on the BMWi 7 Series (audio) using an earlier version of Microsoft’s Voice Command.

It needed a little work.

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