Mercedes, for one, is betting connected car technology will be as important to many potential A-Class buyers as the engine under the hood.

Interest in the connected car is steadily growing as consumers demand to have internet and mobile phone services at their fingertips, even when they’re behind the wheel.

Intel Corp., which now considers automobiles a major source of demand for smart devices, plans to spend $100 million between now and 2014 on an initiative designed to spur innovation and product development to significantly enhance the functionality of connected cars in the years ahead.

“In today’s mobile world, personal computing touches every part of consumers’ daily lives while at home, at the office and on the road,” said Intel President and CEO Paul Otellini. “By broadening our research efforts, academic and capital investments and opening the Automotive Innovation and Product Development Center, Intel is deepening its understanding of how people interact with their cars and how Intel innovations can enhance the automotive experience.”

Much of the money will go towards a new Automotive Innovation and Product Development Center in Germany as well as expansion of Intel Labs Interaction and Experience Research into the automotive space and an academic outreach program that will tap into the new Intel Connected Car fund.

If Intel needed any proof that it was on the right path it simply needed to look towards Europe, these last few days, automotive industry leaders gathering for the opening of the annual Geneva Motor Show.  While there was plenty of sheet metal on display, the connected car was also a hot topic.

Significantly, when introducing the newly-redesigned A-Class model, Mercedes-Benz brand chief Dieter Zetsche first focused on its high-tech infotainment system, suggesting the luxury maker “gave the iPhone its own set of wheels,” noting that its infotainment system will be able to access contacts off an iPhone, while also displaying Facebook content and linking to various smartphone apps.

(For more on the A-Class launch, Click Here.)

Intel’s Automotive Innovation and Product Development Center in Germany will serve as Intel’s global center of competence for the development of products and technologies for in-vehicle infotainment and telematics solutions for the connected car.

Located in Karlsruhe, Germany, the center benefits from its proximity to top technical universities and a robust ecosystem of hardware and software vendors with expertise in automotive technology. The customized facility features a unique secured car park that provides an on-site location for Intel to install, test and showcase developments.

Additional features include state-of-the-art instrumentation, a myriad of antennae to provide satellite, TV, digital video and GPS for development and testing, and a world-class engineering computer infrastructure , Intel officials noted.

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