Tuesday, June 25, 2024
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Ford taps former Apple executive Peter Stern to build high-margin digital services

Ford Motor on Monday named former Apple executive Peter Stern as the president of its newly formed Ford Integrated Services unit to help build new high-margin digital and subscription services.

Stern, who previously oversaw Apple TV+, iCloud, and Apple News+, will report to Jim Farley, the CEO of Ford. In his new position, Stern will focus on integrating hardware, software, and services across the company’s Ford Blue, Model e, and Ford Pro units.

Like other US automakers, Ford wants to go beyond its established wholesale-to-dealer business model and create recurring income from services related to its automobiles, much like Apple has done with its hardware products.

Doug Field, the chief advanced product development and technology officer at Ford, and Stern are both former employees of Apple. In May, rival General Motors hired a former Apple executive Michael Abbott to lead its software business.

The arrival of Ford’s next-generation electric vehicles in 2025 will pave the way for the development of new services for both retail and commercial purposes, according to Farley, who stated this in a media briefing on Monday.

“We’re not going to limit it to EVs — we’re going to put it on the F-150,” Ford’s best-selling pickup truck, Farley, said.

Ford currently has over 550,000 paid subscribers for software and services, with the Ford Pro commercial unit accounting for over 80% of those customers.

Farley claimed the company was bringing in “hundreds of millions of dollars,” with “enormous margins” of 50% and more.

According to Stern, Ford intends to develop “bundles of services” that deliver “safer, more convenient, and more productive experiences.”

“The basis for differentiation is shifting from the vehicles alone to the integration of hardware, software and services,” Stern said.

iCloud and Apple Music were among the services offered by Apple when Stern started working there in 2016.

“When I left, (Apple) had over a billion customers subscriptions,” he said.

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BRL Editor
BRL Editorhttps://businessreviewlive.com
Business Review Live covers finance, technology, travel, lifestyle, and everything in between through exclusive interviews and analysis, market statistics, digital video, and an expanded array of content formats.