What Cadillac learned from the iPhone by Doron Levin @FortuneMagazine October 19, 2011, 5:54 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons FORTUNE — It sounds like a next-generation iPhone — voice recognition, multitouch, a slick interface. But it’s not. Instead, this is General Motor’s upcoming in-vehicle communication system, dubbed CUE for “Cadillac User Experience,” due next spring in the company’s flagship car, the Cadillac XTS. And it’s the American luxury manufacturer’s latest bid to make its mark in the hard-fought and lucrative full-size, high-end sedan market. For years, auto companies have promised the technologies that have become commonplace in people’s smartphones would make their way into car dashboards. Until recently, the results have been mixed. Now, high-tech features are increasingly influencing shoppers to choose one model over another. And GM GM wants in. The company is betting that it can make technology a key differentiator for the XTS, which is likely to compete with some of the most expensive vehicles from the likes of BMW, Toyota’s TM Lexus and Mercedes-Benz. “Cadillac wants to bring young buyers to its brand, buyers who already own iPads and know how to use high-tech gadgets,” notes Brandy Schaffels, senior editor for TrueCar, an automotive consumer website. “But Cadillac also doesn’t want to alienate technophobes” among older, longtime owners of the brand. Indeed, the strategy isn’t without risks. If customers find the system too hard to use, Cadillac could instantly suffer as irate or perplexed drivers rate the car’s overall quality as subpar, hurting the brand and sales. Ford Motor F — and BMW before it — found out the hard way about the risks of cutting-edge gadgetry. Earlier this year the J.D. Power & Associates initial-quality survey dropped Ford to 23rd place from fifth, a bad blow. The problem? Many Ford customers were dissatisfied with its vaunted Sync interface that integrates hand-free telephony, entertainment and voice-recognition. In particular, some Ford customers reported that their smartphones didn’t connect well with their car’s hands-free system, which should be able to manage calls as well as contact lists and telephone numbers. With CUE, Cadillac aims to offer as much complexity and sophistication as the driver who is tech-savvy can handle — and as little as a “simple user” wants. But packaging simple and complex in one can be a challenge. The heart of the CUE system is an 8-inch LCD touch screen that displays a home screen. As the user’s finger gets closer to the screen, the system detects it and makes icons appear automatically. So-called haptic feedback allows the user to sense, by way of a small vibration, that an icon has been activated — avoiding the distraction of looking away to make sure a selection has been made. Swiping and pinching, much like on an Apple AAPL iPhone or iPad, are present as well. All firsts in a car, according to GM. Cue’s pairing format allows the user to connect it to as many as 10 Bluetooth-enabled mobile devices. Buttons are reduced to four from as many as 20 on systems from other car brands. To make things simple, many of the features can be turned off. And just in case the driver prefers good old button and wheel controls on the steering wheel, they’ll be there as well. Stuart Norris, the system’s design manager, said Cadillac engineers studied systems on BMW, Audi and Mercedes luxury brands, which rely heavily on console-mounted controls. “We’ve been seeing a proliferation of touch interfaces for the iPod generation,” he said. “We’ve spent time with customers who tell us they don’t want to relearn technology for use in the car.” CUE, he said, will offer “natural” speech recognition that doesn’t require the user to acclimate the system. Still, even the most technologically savvy users will likely need some training with so many features — from the integrated Pandora web radio to that old stand-by, OnStar. Whether that endears them to their new Cadillac could help determine the fate of the company’s most high-profile launch of the next few months.