Ford Motor Company took a significant stride toward its digital transformation strategy on Monday by appointing Peter Stern, a former Apple executive, as the president of the newly established Ford Integrated Services unit. This move signifies the automaker’s commitment to crafting pioneering, high-margin digital and subscription services that will reshape its revenue landscape.
Ford Hires Apple Executive to Lead Integrated Services
The renowned Peter Stern, acknowledged for his past leadership roles at Apple TV+, iCloud, and Apple News+, will directly report to CEO Jim Farley. In his new role, Stern’s primary mandate will be orchestrating the convergence of hardware, software, and services within Ford Blue, Model e, and Ford Pro units.
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In a strategic maneuver mirroring the likes of its industry peers, it aims to transcend the boundaries of its traditional wholesale-to-dealer business paradigm. Instead, it endeavors to construct a recurring revenue stream by establishing service offerings intertwined with its vehicles, taking a page from Apple’s playbook that successfully interweaves services with its hardware portfolio.
Jim Farley, addressing the media on Monday, unveiled imminent plans to introduce a novel digital vehicle architecture in 2025 in conjunction with the release of the next-gen electric vehicles. This ambitious initiative is anticipated to pave the way for a plethora of fresh services catering to both retail and commercial customers. Importantly, Farley emphasized that this paradigm shift wouldn’t be confined to electric vehicles, and even the acclaimed F-150 pickup truck would benefit from this innovation.
Ford has impressively amassed over 550,000 dedicated subscribers for its software and services. A noteworthy 80% of these subscribers have been drawn in through the Ford Pro commercial unit, an achievement that stands as a testament to the robustness of Ford’s evolving service-focused strategy.
Jim Farley pointed out the substantial financial gains yielded by this endeavor, highlighting “hundreds of millions of dollars” in revenue, paired with astonishingly healthy profit margins soaring beyond 50%.
In response to his new role, Peter Stern articulated the auto giant’s ambitious plans to amalgamate services into compelling “bundles,” fostering experiences that are not just safer and more convenient but also decidedly more productive.
Stern postulated that the axis of differentiation in the automotive landscape is shifting. It’s no longer solely about the vehicles themselves, but the seamless amalgamation of hardware, software, and services. He harked back to his tenure at Apple, noting the growth of the company’s services during his tenure, which encompassed monumental successes such as iCloud and Apple Music, ultimately accumulated over a billion customer subscriptions.
The appointment of Peter Stern and Ford’s persistent pursuit of a service-oriented future highlight the automaker’s resolve to redefine its identity in a time when technological integration and creative subscription models are the norm.