01.jpgUsing Google's Android mobile phone software, the device is due to go on sale within weeks.
French manufacturer Parrot said it will cost around the same amount as a normal car stereo.
Its ability to download apps means there is access to online music services such as Spotify, although Parrot said it was still finalising which services it will use in the UK.
The voice-activation feature allows users to tell the stereo what they want to listen to, and a scroll wheel can move through menus.
'For instance, if you tell it you want to listen to Lady Gaga, it will scan your iPod and tell you what songs you have, but also go and look online for Lady Gaga songs,' said Parrot’s Fabien Laxague.
Using Google's Android mobile phone software, the device has access to millions of songs and is due to go on sale within weeks
'This is very new, but we think apps in the car will become a huge market. There are an unlimited number of applications that we are thinking about, everything from an app that shows you nearby parking spaces to one that gives you directions.
'When users want new features, they can simply download them.'
Several apps will be offered initially, and the firm will set up a special app store so users can download more via a 3G dongle that plugs into the back of the system.
Experts say the radio is another example of how apps, first pioneered by Apple for its iPhone, are increasingly becoming available in other gadgets.
'This really shows that the next battlefield for technology is the car,' said Stuart Miles of gadget website Pocket Lint.
'People are used to having apps on their phones and even on their televisions and other gadgets these days, so now they want apps in their car as well.
'Until now cars have been relatively low-tech - you go in and listen to the radio, or play your iPod. This takes in-car technology to another level.'
