Ford Succeeds with BYO Philosophy for High-Tech Devices

(MoneyWatch)  The people in the auto industry who develop high-tech electronic systems must sometimes feel like the ordinary mortals in the movie, "The Matrix," moving at what appears to be slow motion, versus the fast-forward machines.

That's because it takes three or four years to develop a new car, versus every few months for new software. Increasingly, that hard fact is forcing the car companies to abandon their old business model for electronic devices, where the customer had to buy a feature like a cell phone docking station that would be obsolete in six months.

Ford is a leader in taking up a different philosophy, where the car acts like an interface with the customer's own devices, like cell phones, PDAs and MP3 players. Ford has also been innovative in taking on outside partners like Microsoft, which helped develop the Ford Sync system, which provides voice control and pipes the customer's devices over the car's stereo speakers.

BNET Auto's Jim Henry recently interviewed Mark Scalf, Ford product and business development manager, electrical and electronic systems engineering. The following are edited excerpts:

BNET: Since cars have such a long lead time, I've heard it said that the car companies face a fork in the road that you could call "buy or bring." That is, force the customer to buy your device, which is going to be obsolete by the time you can design and sell it, or allow the customer to bring their own, which can be updated by the makers of the device.

Mark Scalf: That's exactly right. We want to provide a means to interact with their (customers') devices. You can keep your phone in your pocket and still get the information you need. We are very much into leveraging the brought-in device.

BNET: You're adding new features, like traffic reports and turn-by-turn driving directions. In earlier days, that would be either impossible, or the customer would need to keep buying new CDs or DVDs to keep it updated.

MS: Today, the platform for all that data is outside the vehicle, and it's maintained by a whole network of partners -- and not by us. The advantage of that is that the information changes constantly.

BNET: How is it going, rolling out features like Sync? It was introduced first on your less-expensive models, which was a new and different way of doing it, instead of the usual industry practice of starting with your more expensive models and working your way down. That part I'm familiar with, but how has Sync been rolled out since then? Is it available on every model?

MS: It's on everything except some of our older models such as the Ford Ranger (pickup) and the Crown Vic (full-size sedan). For some models and trim levels it's standard, for some it's optional. Where it's optional it's a $395 option. TDI, that's Traffic, Directions and Information, comes with three years free, after that it's $95 per year.

BNET: That's a lot cheaper than buying a navigation system. Your cell phone tells the system where you are, which is more or less how a full-blown navigation system works, anyway. Is anybody still buying navigation?

MS: Navigation is about a 10 percent take rate overall.

BNET: You said earlier that Sync has a 70 percent take rate. Is that across the line, or is that just on the Ford Focus? And is it just on the models where it's optional, or does that include models where it's standard?

MS: That's on everything, and that take rate includes standard and optional.