Ford Moving Toward Upgradable Technology to Increase Revenue

Ford Motor Company is looking at new ways to combine popular GPS, internet and music technology in hopes of selling more cars. The new programs would allow drivers to upgrade the electronic technology in their vehicles much like users add apps to iPhones and Blackberrys.

Sync technology, developed by Microsoft Corporation and Ford, combines GPS location-finding, Internet and digital music services, and Ford is hoping to use the existing technology as a platform for a more interactive and upgradeable experience for drivers.

New applications might do things like offer directions to all coffee shops along a certain highway open after 9 p.m., or make it possible for friends to caravan somewhere using GPS breadcrumb technology. The idea behind this sort of technology is making cars as easy to customize as a laptop or a smart phone.

In creating programs like this, automakers can encourage car owners to continue to spend money on the cars by adding technology. This will increase revenue, especially on the smaller cars that bring lower or no profit. Ford and other automakers that offer apps programs could collect fees for upgrades just as Apple receives fees from apps developers for the iPhone and iPod.

Ford is expected to make the code needed to write Sync compatible software in a developer’s kit so that the developers can write software that will be compatible with the system.

Sync customization capabilities have been slowly expanding; the SyncMyPhone address book was released recently, and next month Ford will debut new navigation and social media features at the International Consumer Electronics Show in Las Vegas.

It has not been decided whether or not Ford will own its own apps store the way Apple does for its iPhone. They are currently working on license agreements with apps developers that would give them part of the revenue generated by apps upgrades.

The move to expand the Sync platform is Ford’s attempt to retain a competitive advantage as other automakers add similar technologies to their vehicles. Ford had held the exclusive rights to the Sync software, but it has now expired, and other automakers like Hyundai are working on partnerships with Microsoft.

The Sync system was introduced in 2007 and controls the vehicles entertainment system as well as enabling drivers to dial cell phones hands-free. It is voice activated and offers features such as navigation, business finders and automatic crash notification along with other programs. Sync technology is available on roughly two dozen Ford models.

Many automotive analysts believe that use of systems like Sync will grow quickly. Gartner Incorporated, a research firm, has estimated the expected growth to be as high as $40 billion in 2016. Last year the number was around $6 billion.

Gartner’s automotive analyst, Thilo Koslowski, says, Cars are commodities, and every manufacturer realizes it. Something like Sync and the software it downloads become an important differentiator.

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