By Christopher A. Sawyer
Diversified revenue streams are one way to bolster the bottom line and ride out downturns in your main business. In the past, car companies have tried to add brands in different sectors to increase profits, but this hasn’t always worked well; especially when the associated costs in the margins are as high as for mainstream brands. With the rapid increase in infotainment systems, however, the opportunity exists for a company to grow its bottom line by becoming the app king. Until recently, most folks expected this to be either Google or Apple, the largest app providers in the smartphone market.
Now Ford has announced it is giving its AppLink application programming interface (API) and software development kit (SDK) to any automaker who wants it. The combination is free of charge, with no restrictions on how they use it. The idea is to speed auto industry adoption of vehicle apps by attracting developers to build car-specific versions of current offerings as well as new items designed specifically for in-vehicle use. And it doesn’t hurt that this increases Ford’s opportunity to leverage both AppLink and Sync, much as Google has done with its Android software in the smartphone world. Not only does this have the chance of adding to Ford’s balance sheet, it could create a landscape of apps from which it could pick and choose without having to seed their development. Smart.
Or is it? Rival automakers have created their own architectures, and they reach deeply into the heart of the vehicle’s control systems. No one is going to want to open their operating systems to a competitor. Also, they worry Ford could delay the release of updates to benefit itself. Showing up to the party six months or a year later would put them in an also-ran position, and cast Ford as the industry technology leader.
It’s likely that a core of large and technology-leading automakers will continue to develop their own architectures, leading to an automotive version of the Apple, Google, Microsoft operating system competition we see in the computing sector. However, even paring the number of architectures down to a quartet of contenders would be a major improvement. This would entice more developers into the fray as the number of custom applications dropped. It also would allow those companies that wanted to keep control over their turf to do so, relieve the burden on the aftermarket to develop its own applications, and increase the robustness of both operating systems and apps.
It’s much too early to tell if and how Ford may benefit from this move, but it is the first sign of a contraction in the number of competing systems; a process that likely will pick up pace over the next couple of years. By staking its claim early, Ford has announced that it intends to lead, not be left behind.