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Microsoft Partners With Harman Kardon for Echo-Like Device

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Microsoft made it loud-and-clear that its Cortana-powered digital assistant will soon be competing with Amazon Echo and Google Home in the connected-speaker space through a partnership with Harman Kardon.

The announcement was one of many made Tuesday during a small press event in San Francisco's South Beach neighborhood.

Harman Kardon will be the first brand to integrate Cortana in a newly designed high-end speaker, which is slated for a 2017 release.

"When you think of Echo, you think of ecommerce. And when you think of Google Home you think of voice enabled search," a person familiar with the deal told Ad Age at the San Francisco event. "But when people think of Harman Kardon, they think of high quality audio. And that's what I think you'll see coming from this."

The source added that companies that offer music-streaming services might look to include themselves in Harman Kardon's marketing. The yet-to-be-named IoT device might also look to market itself more as an entertainment solution than something used to look up recipes, for example.

The partnership with Harman Kardon will likely be one of many, as Microsoft is opening up its developer tools so Cortana can be integrated in everything from cars to home appliances.

"This is a case of two companies sticking to what they both do best, and thinking about the value of a more connected experience," Susan Etlinger, an industry analyst for Altimeter, said. "It makes sense that you'd want to ask your speaker to play a song for you; why not have it book a plane ticket, too? We're going to see a lot more of this type of thing in the next year."

Like Apple's Siri or Amazon's Alexa, Microsoft's Cortana is considered an "agent." The end game, Ms. Etlinger says, isn't for companies to become the speaker of choice for consumers, but the agent of choice across a large swath of connected devices such as appliances and cars.

"There is going to be a war of the agents in 2017 between Google, Apple, Amazon, Samsung and Microsoft," she said. "So we'll need to see how it rolls out. It's still early days, but the key will be to see which company delivers the most usable, useful and natural extension to people's lives."

Marcus Ash, partner group manager for Cortana, told the audience of about 30 in San Francisco that Cortana will soon be connected in cars, too. Although Microsoft already develops vehicle entertainment displays for manufacturers like BMW, Nissan, Ford and Fiat, it tailors them to each company, as opposed to other alternatives like Apple CarPlay and Google's Android Auto.

Meanwhile, Microsoft also announced its Cortana Skills Kit, which will allow companies to include their services through the virtual assistant. Capital One, for example, will allow consumers to pay bills by speaking to Cortana through a Windows 10 computer, for example. It is the only bank to offer such service to its customers.

The process requires the user to give several prompts to execute, but may become more useful in vehicles, Ken Dodelin, VP of digital product development at Capital One, told Ad Age. Although no such feature exists today, Mr. Dodelin said Capital One wants to be wherever the consumer is, and that developing its solution for vehicles makes sense as more consumers demand more hands-free experiences.