Ford and software services

Ford Enlists Former Apple VP to Head Software Services

Ford Motor Company has made a strategic move by hiring Peter Stern, a former key executive from Apple Inc., to spearhead a groundbreaking venture in the automotive industry. Stern, who served as Apple’s vice president of services, will now assume the role of president at Ford Integrated Services, a newly established business unit aimed at delivering innovative software-related subscription services to vehicle owners.


The announcement, made by the Dearborn-based automaker on Monday, highlights the determination of Ford to transform the driving experience through a fusion of cutting-edge software and hardware services. Drawing from his extensive experience at Apple, where he oversaw prominent ventures like Apple TV Plus, iCloud storage, and Apple Books, Stern’s leadership is expected to drive Ford’s foray into integrated software offerings.


Under Stern’s guidance, Ford Integrated Services is poised to evolve the acclaimed BlueCruise hands-free partially automated driving system, along with a suite of productivity, safety, and security services. Stern, who reported directly to Apple CEO Jim Farley during his tenure, is expected to replicate his success by enhancing Ford’s software capabilities and broadening its customer-centric offerings.


Responding to queries about consumer subscription fatigue, Stern expressed confidence in the continued demand for value-driven services. He emphasized that as long as consumers perceive meaningful benefits, they will continue to opt for both standalone services and bundled offerings. Stern’s insights align with his experience at Apple, where he witnessed the exponential growth of subscription services from a mere two (iCloud and Apple Music) to over a billion subscriptions across diverse offerings.


Anticipating a surge in interest for safety and security services, Stern pointed to a recent Ford showcase featuring an SUV equipped with intelligent technology. The vehicle, showcased at a campsite, seamlessly identified the presence of a bear and promptly activated the horn and lights to deter the animal. Stern’s vision for safety and security services aligns with Ford’s commitment to redefining safety standards in the automotive industry.


Ford CEO Jim Farley revealed that the company currently boasts an impressive 550,000 paid subscribers for software services, yielding a remarkable 50% profit margin. However, Farley clarified that Ford is not immediately planning to bifurcate the Integrated Services unit into a standalone business or disclose its earnings on the financial statements. Instead, the company’s strategy revolves around a comprehensive rollout of an advanced vehicle electrical system in 2025.


This new electrical system will facilitate the integration of a diverse range of software services into both forthcoming electric vehicles and traditional combustion-engine models. As Ford seeks to lead the charge in innovation, the company aims to incorporate these services across its portfolio, including its highly anticipated new iteration of the F-150 pickup truck.


Following the news of Peter Stern’s appointment, Ford’s stock exhibited a marginal uptick, reaching $12.18 during midday trading on Monday. The executive’s arrival heralds a pivotal moment for Ford, as the company positions itself to capitalize on the growing trend of software-driven services. Leveraging Stern’s expertise gained from his tenure at Apple, Ford aims to expand its software offerings, potentially opening avenues for enhanced profitability in the foreseeable future.


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