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Aug 03, 2023

Ford taps Apple exec to build high

The Ford logo is seen on the grill of an E-transit concept vehicle at the Ford Halewood transmissions plant in Liverpool, Britain, December 1, 2022. REUTERS/Phil Noble//File Photo Acquire Licensing

The Ford logo is seen on the grill of an E-transit concept vehicle at the Ford Halewood transmissions plant in Liverpool, Britain, December 1, 2022. REUTERS/Phil Noble//File Photo Acquire Licensing Rights

Aug 14 (Reuters) - Ford Motor (F.N) on Monday named former Apple (AAPL.O) executive Peter Stern as the president of its newly formed Ford Integrated Services unit to help build new high-margin digital and subscription services.

Stern, who previously oversaw Apple TV+, iCloud and Apple News+, will report to Ford CEO Jim Farley. In his new role, Stern will focus on integrating hardware, software and services across the company's Ford Blue, Model e and Ford Pro units.

Like other U.S. automakers, Ford is looking to expand beyond its traditional wholesale-to-dealer business model and build recurring revenues from services connected to its vehicles, much as Apple has built on its hardware products.

Stern joins an executive team at Ford that includes another Apple alumnus, Doug Field, who is chief advanced product development and technology officer. Rival General Motors (GM.N) in May also hired a former Apple executive, Michael Abbott, to run its software business.

Farley, in a media briefing on Monday, said a new digital vehicle architecture, due out in 2025 with the arrival of Ford's next-generation electric vehicles, will enable the development of new services for both retail and commercial customers.

"We're not going to limit it to EVs - we're going to put it on the F-150," Ford's best-selling pickup truck, Farley said.

Ford now has more than 550,000 paid software and services subscribers, more than 80% of them through the Ford Pro commercial unit.

That business is generating "hundreds of millions of dollars" in revenue, Farley said, "with enormous margins" of 50% and more.

Stern said Ford plans to create "bundles of services" that will provide "safer, more convenient and more productive experiences".

"The basis for differentiation is shifting from the vehicles alone to the integration of hardware, software and services," Stern said.

One of Stern's first tasks is to help expand Ford's BlueCruise hands-free driving package, which is being extended to more vehicles in the 2024 model year.

Ford will install BlueCruise hardware on another 500,000 vehicles next year, while giving customers the option of activating the subscription package at any point during ownership, rather than just at time of purchase.

The automaker plans to offer BlueCruise in a wider variety of Ford and Lincoln models, including F-150, F-150 Lightning, Expedition, Navigator, Nautilus and Corsair.

When Stern joined Apple in 2016, the company's services included iCloud and Apple Music.

"When I left, (Apple) had over a billion customers subscriptions," he said.

Reporting by Nathan Gomes in Bengaluru and Paul Lienert in Detroit; Editing by Krishna Chandra Eluri, Sharon Singleton, Jonathan Oatis and Jan Harvey

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