Ford Shifts Vehicle Hub Concept Into High Gear


Archived Published: 17 March 2008 ID: G00156346

Analyst(s):

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Summary

Ford's continued development of the vehicle hub concept gives it a clear, product-differentiating edge among vehicle manufacturers in terms of vehicle information and communication technology and telematics strategies.

News Analysis

Event

On 11 March 2008, Ford Motor Company announced a contract with wireless data communications solutions provider Airbiquity to provide its aqLink wireless data communication technology and VIAaq software as a service (SaaS) offering to the automaker’s in-vehicle communications system, called Sync.

Analysis

This announcement underscore's Ford's commitment to its "vehicle hub" concept, called Sync, which acts as a user interface that enables consumers to connect portable electronic devices to the car.

What differentiates Ford's approach from that of most other vehicle manufacturers is the fact that it requires fewer embedded vehicle-centric information and communication technology (ICT) components, which otherwise would duplicate device technologies that many consumers already own.

Ford's more software-based hub system is simpler and more cost-effective, requiring fewer hardware components and facilitating easy system upgrades. While other manufacturers normally must wait for new model introductions to upgrade embedded in-vehicle technologies, Ford's approach facilitates easy system upgrades that are primarily software-based and can be downloaded over the Internet, transferred to a USB stick and installed by consumers. For example, Ford introduced Sync in late 2007 and has already upgraded it, adding an emergency call feature and new diagnostic capabilities, both of which will become available to consumers in fall 2008.

Airbiquity’s SaaS solution allows Ford to add data capabilities for dynamic content offerings in the future. While Ford has not defined yet exactly what services it is planning to offer, it is likely the company will launch data-centric services that could include traditional Telematics offerings and innovative location-based services. GPS functionality will be embedded in the next-generation hardware.

What remains to be seen is whether and how makers of portable electronic devices such as cell phones and personal navigation devices (PNDs) will embrace or compete with the hub concept. PNDs already have intuitive user interfaces that feature voice as well as touch screen interaction, and PND makers have designs on a consumer market that does not depend on the vehicle to act as a hub.

Recommendations

Vehicle manufacturers:

  • Take a lesson from this. Consider a similar vehicle hub approach that centers on consumers’ portable devices rather than trying to embed everything into the vehicle and limiting yourself.

  • Watch the reaction of cell phone manufacturers and network carriers that are centering on wireless services — especially location-based services. Vendors in the PND space could begin offering similar services on their devices in the future and compete for market share. Innovations in user and human machine interfaces will provide competitive differentiation.

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