Ford expects revenue from in-car software services, such as its hands-free driving feature, to increase by 1,000% in the coming years.
- To capitalize on this growth, Ford has hired Peter Stern, former vice president of services for Apple, to lead a newly created technology-focused unit. Stern’s role includes expanding Ford’s BlueCruise hands-free driving system and developing other in-car services for millions of vehicle owners.
- Ford aims to establish a steady revenue stream from software services to mitigate the cyclical nature of the automotive business. The company already has around half a million software subscribers, primarily in its commercial fleet business.
- CEO Jim Farley anticipates significant revenue growth, with expectations of a tenfold increase in the coming years. Selling in-car services, such as speed control software, generates gross margins above 50% for Ford, compared to the 8.3% margin the company had in the first half of the year.
- Ford plans to introduce a new electrical architecture in its ICE (internal combustion engine) and electric models starting in 2025 and 2026. This will enable the automaker to offer more subscription services in areas like safety and security.
- Ford sees software services as its fastest-growing revenue segment, with the potential for substantial margins.
- Peter Stern is the latest former Apple executive to join the automotive industry, following Doug Field, who was hired by Ford in 2021, and Mike Abbott, who joined General Motors in May from Apple’s Cloud Services division.