Ford Hires Apple Software Exec With a Plan for Subscription Services
Ford is not trying to nickel and dime customers with service options, says ex-Apple exec Peter Stern in his new role.
The auto industry is littered with bad choices about subscription services, says Ford CEO Jim Farley. He wants to avoid them as Ford works to aggressively expand subscription services and has hired a high-profile Apple exec to develop, integrate and market them for the U.S. automaker. Ford will not follow the lead of companies charging customers to activate their heated steering wheels or seats or e-commerce ability, Farley stressed to media on a call to introduce Peter Stern, president of the newly formed Ford Integrated Services.
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It is Stern's first day on the job after leaving Apple where he was vice president of Services overseeing Apple TV+, iCloud, Apple News+, Apple Books, Apple Arcade, Apple One and Apple Fitness+ and MLS Season Pass. He also headed marketing for all Apple services, including the App Store, Apple Card, Apple Pay, Apple Music, Apple Podcasts and Apple Maps. And oversaw Apple's ad businesses. Apple had more than 1 billion subscriptions when Stern left. Before Apple, Stern was at Time Warner Cable (now Warner Brothers Discovery) where he helped build a subscription base for the media giant.
Stern reports directly to Farley and his new division will integrate hardware, software, subscriptions, and services, including the expansion of BlueCruise hands-free driving, for Ford's other three divisions: Blue Oval (vehicles with combustion engines), Model e (electric vehicles), and Ford Pro (commercial vehicles). Stern says he will be joined at the hip to Doug Field, Ford's chief advanced product development and technology officer. The two men worked together at Apple.
Creating Better Vehicles, Regardless of Powertrain
The new hire and structuring is part of the Ford+ strategy to transform Ford into a hardware/software company where digital revenue is vital. To that end, the next-generation of electric vehicles from Ford, starting in 2025, will be software defined vehicles using Ford-developed software that can be updated over the air (OTA). And the electrical architecture will also make its way into vehicles with combustion engines, starting with the next-generation F-150 which will be a fully updatable software vehicle, Farley says.
It will allow Ford to have an ongoing relationship with customers after purchasing their vehicle, via services, subscriptions, and other digital revenue. Ford is generating hundreds of millions of dollars now in revenue with gross margins of more than 50 percent and Farley says he expects 10 times that in the coming years.
Building Out BlueCruise
Stern's immediate focus will be to expand Ford's BlueCruise hands-free driving system. Some 2023 Ford Mustang Mach-E SUVs with the latest BlueCruise 1.3 are being shipped to dealers now, Farley said. Stern also will focus on safety and security services which he sees as a largely untapped area of opportunity. But Ford will not relieve its emphasis on Ford Pro customers. Of the 550,000 subscribers to date, 80 percent are commercial customers paying for logistics services that help improve productivity.
Farley and Stern are convinced customers will embrace new technology and be willing to pay for it if it improves their lives. The confidence flies in the face of growing frustration by customers concerned about the high cost of vehicles, additional cost of services, and how complicated it all has become to use. Ford is not nickel-and-diming people, Stern says. The company is offering significant value. Customers will want to sign up for a safer, more convenient, more productive time and experience with their vehicles.
Alisa Priddle joined MotorTrend in 2016 as the Detroit Editor. A Canadian, she received her Bachelor of Journalism degree from Carleton University in Ottawa, Ontario, and has been a reporter for 40 years, most of it covering the auto industry because there is no more fascinating arena to cover. It has it all: the vehicles, the people, the plants, the competition, the drama. Alisa has had a wonderfully varied work history as a reporter for four daily newspapers including the Detroit Free Press where she was auto editor, and the Detroit News where she covered the GM and Chrysler bankruptcies, as well as auto trade publication Wards, and two enthusiast magazines: Car & Driver and now MotorTrend. At MotorTrend Alisa is a judge for the MotorTrend Car, Truck, SUV and Person of the Year. She loves seeing a new model for the first time, driving it for the first time, and grilling executives for the stories behind them. In her spare time, she loves to swim, boat, sauna, and then jump into a cold lake or pile of snow.
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