Talk to designers of a car company’s entertainment system and they’re quick to bring up two devices: smartphones and tablets.

Around 24% of car owners use an iPod or MP3 player to listen to music in their vehicles, although that increases to around half when asking 18- to 24-year-olds, according to Arbitron, Edison Research and Scarborough Research. Around 6% stream Pandora from a phone; up to 19% among the younger set. Of those questioned, 38% are interested in connecting phones to interact with apps on an infotainment system.

Not all infotainment designers are app-obsessed, however. Most caution that the point of driving should still be about focusing on watching the road and controlling the car.

With the ubiquitous adoption of the app-filled devices around the world, “entertainment is mobile,” says Stuart Norris, senior design manager at General Motors’ Cadillac division. “We’re expecting so much from our cars now. You want connectivity wherever you live and you can’t get more mobile than being in the car.”

As a result, the car is yet another platform Steve Jobs and his team at Apple have influenced forever.

Nearly every automaker has revamped or is readying to roll out new infotainment systems that easily connect to cell phones, tablets, offer WiFi and a variety of apps through large touchscreens that look and operate like the graphically slick software on most mobile devices.

The auto industry prefers the term infotainment because in addition to a variety of audio platforms, the systems are adding more information to traditional navigation systems (naturally, now in 3D!) like live traffic, weather, news, sports and stock updates, local gas prices and restaurant recommendations.

Providing that mix of info and entertainment are versions of familiar apps that fill up iPhones, iPads and Android devices.

Online music service Pandora, for example, has made itself at home in cars as it has on smart TVs, videogame consoles and mobile devices. Other app makers are also going along for the ride. BMW recently brokered a deal with Yelp to provide restaurant reviews and local eatery suggestions to drivers. Audi has Google Earth in its newer vehicles. And Toyota’s Entune features Bing, iheartradio, MovieTickets.com, and OpenTable, along with Pandora. It’s only a matter of time before Netflix also hits the road.

This week’s Consumer Electronics Show introduces even more features, with a keynote by Daimler’s Dieter Zetsche outlining Mercedes-Benz’s moves to catch up to its competitors with new infotainment offerings that include gesture controls, 3D displays, handwriting recognition and software developed specifically for the iPhone that will incorporate such social networking tools as Facebook.

CES has become more car-friendly over the years, with Ford and Audi chiefs added to the confab’s roster of official keynotes and the show hosting a pavilion for auto-related technology.

Ford will promote its futuristic Evos concept, a vehicle that connects to cloud-based services to deliver information and entertainment, but also track a driver’s behaviors and predict preferences.

The Evos “shows the future of where we see connectivity going,” says Jim Buczkowski, director of electronic research at Ford Motor Co.

Ford also will showcase updates of its popular MyFord Touch system, which enables apps from companies such as Pandora, Stitcher and OpenBeak to be accessed in its cars through SYNC and voice controls, and will soon double that to include iHeartRadio, Slacker Radio, TuneIn and NPR.

In making the deals, Ford and other automakers aren’t necessarily doing the heavy lifting. They want drivers to be able to access the entertainment they’re already carrying around on their phones and are providing that connection in the car — any software updates are carried out when a driver updates the apps on their phone.

“We think that the phone is going to be very central to many people’s lives today and many people’s lives in the future,” Buczkowski says. “The phone will be the access point to experiences.”

Cadillac recently spent the past three years designing its new CUE system (or Cadillac User Experience) after iPhone sales had taken off and the iPad was still two years away. The result is a system that could easily be mistaken for one, with its large 8-inch touchscreen housed in a shiny piano black frame mounted on the centerstack.

“We were already inundated with our iPhones in 2008 and wanted to figure out ways to scale this kind of (touch) interface for automotive,” says Norris, who knew CUE’s success would be dependent upon seamless connections to smartphones to deliver entertainment.

CUE will debut in 2012 in the Cadillac XTS and ATS luxury sedans and SRX luxury crossover.

“We went through a period where we were offering 40 gigabyte hard drives that people ripped their music to in order to play it in their cars,” Norris says. “People don’t want 15 different places where they have to save their music.”

If an app is offered, it “should be related to driving,” says Filip Brabec, general manager of product planning for Audi of America. He considers apps “a new area that still needs to be looked at deeper. There are early examples of where the industry is going but it’s a matter of time before we see that in more cars.”

“For us the key thing is the driving experience and that’s one thing we’re going to expand on,” Brabec says. “We want to make sure it’s entertainment that’s meant for driving. There are only so many things you can carry out as a driver. That’s only getting more complex with more traffic and people getting busier. People want to increasingly do things inside their car and we want to enable them in a safe environment that’s keeping in mind all of the things that are distracting to drivers.”

As a result, designers are adding more voice controls or text-to-speech translations to their infotainment systems “to make information available but in a way that makes drivers focused on what’s important, to drive and keep your eyes on the road,” Buczkowski says.

Because of that, automakers have primarily focused on new audio features due to safe driving concerns.

“We completely support a ban on handed operation of the phone,” Buczkowski says. “You should be able to get in your car and through voice command get access to features without having to pull out your phone.”

But new video options aren’t too far behind. While flip-down screens in SUVs and minivans and seatback screens inside luxury cars have been playing DVDs, Cadillac has become the first carmaker to support Blu-ray.

“People are buying Blu-ray,” Norris says. “It’s about giving people access to what they’ve already got and making sure people who have a library of Blu-rays at home can play them wherever they go.”

Others like Audi are looking to provide faster Internet connections that will enable video from such services as Netflix, Hulu, Amazon and UltraViolet to be streamed directly to devices.

“Once people will be able to stream movies in their back seat, that will completely change the landscape of in-car entertainment,” especially when it comes to entertaining kids, Brabec says. While Audi, of course, doesn’t encourage drivers to view video in the front seat, “there’s no way to limit it in the car,” he says.

In fact, future innovation of infotainment systems will rely heavily on the Internet down the road, with Ford and Mercedes’ concept cars turning to cloud-based storage to deliver entertainment similar to what Apple and Amazon now offer and studios are promoting through UltraViolet’s digital lockers, to access movies, games, books and music.

Audi is considering other options, like connecting its cars wirelessly to parking meters and garages to make payments at the press of a button.

“Again it’s relevant to the driving task,” Brabec says. “We’ve had these kinds of thoughts for a long time, but one thing that prevented us from doing it was the wireless networks. They weren’t in place with the speeds where we wanted to accomplish things faster.”Audi needed faster Interne
t speeds, of which it turns to T-Mobile, and faster chips from NVIDIA to be able to add Google Earth maps onto its cars’ navigation system in 2011, given the bandwidth requirements of the software.

The automaker doesn’t want to get to the point where it will have full Google search functions inside its cars, instead, limiting search to specific terms while driving, leaving full Internet accessibility to cell phones and tablets that connect to its WiFi service.

“There are some things that don’t make sense in the car,” such as traditional Google searches, Brabec says. “You’re far better doing that on your tablet or smartphone. It’s not suitable for driving.”

Cadillac also hopes Internet speeds will help it beef up CUE in the future.

“We’ve already passed the point of relying on people’s smartphones to provide entertainment,” Norris says. “Now we’re focused on how to get 3G and 4G into our vehicles.”

All of this innovation is paying off for automakers, factoring into consumers’ buying decisions when choosing which vehicle to purchase, key for brands in a competitive market. According to the Consumer Electronics Assn., in-car entertainment systems generated $5.9 billion in 2011, up from $5.5 billion in 2010.

For Ford, half of SYNC owners say the system played a critical role in their purchase, with a survey of 2011 Ford Edge owners showing that four of the top seven purchase reasons were elements of the MyFord Touch system: the touchscreen, steering wheel controls, voice recognition and dashboard styling. One-third of Ford customers said their impressions of Ford improved after experiencing a SYNC demo.

There are now more than 3 million Ford vehicles on the road running the original SYNC software, which launched for the late 2007 models, and was updated with MyFord Touch in 2010. Similar options are available in Ford’s Lincoln luxury brand.

“It’s been very important for us,” Buczkowski says. “When SYNC first launched it democratized telematics and was a low cost option to leverage their phone. We have found it’s a differentiating experience.”

WiFi is followed by Google Earth among the top options Audi’s buyers consider, the company claims, given that over a third of its customers own a tablet, more than the average of luxury car buyers.

One key selling point, however, is making sure that these systems work.

Although praised for SYNC and MyFord Touch, Ford hit some bumps in the road for cumbersome controls, which led it to update the system this year with faster software that features simpler graphics that are easier to use.

Naturally, these new entertainment options threaten Sirius XM’s satellite radio’s subscription-based service, and the aging CD and advertising-dependent AM and FM radio channels.

But there’s still time.

“Once network speeds continue to increase, more people will gravitate toward their mobile devices,” Brabec says. “But we don’t expect that until more 4G speeds come along,” which won’t become “ubiquitous” until after 2014. n