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Jun 1, 2009

Ford Sync 3.0 Changes the Car Business

The new version of Ford Sync, introduced this week at CES, isn't just better Bluetooth and audio. It also represents a cheaper way to get navigation and driving information in your car. And most of all, it's part of the car technology revolution where electronics trumps mechanical components.

Ford CEO Alan Mulally introduced Sync 3.0 with Traffic, Directions and Information in a keynote speech at the Consumer Electronics Show yesterday. Sync will include an offboard navigation system that connects to your car via your Sync-connected Bluetooth cellphone and voice (or dashboard) inputs. You request trip directions from a Sync server, it downloads turn-by-turn information, and you navigate via text prompts (no moving map) on the radio display.

There's also traffic information sent to your cellphone as text messages that can be read aloud by Sync, and the ability to get business information, weather, and sports scores. All this comes free for the first three years of ownership, after which there's a monthly service charge that Ford says it hasn't determined yet, or more likely just doesn't want to discuss. Figure $10-$15 a month.


Why Sync Changes the Car Businesses
GM was the first with a telematics package among U.S. automakers: OnStar. OnStar is free for a year, then you pay $200 a a year for crash notification,roadside assistance, and remote door unlock (Safe & Sound package) or $200 a year for rudimentary navigation similar to what Sync 3.0 will offer (Directions & Connections). The most popular option, however, appears to be to let OnStar services lapse (cost: $0 a year) after the first freebie year, meaning millions of GM cars are riding around with disabled safety services. Rather than build a cellphone into each car as GM does, Sync works with what you bring into the car with your: your iPod for music and your cellphone for calling.

Each new version of Sync leverages the cellphone even more. The first version, announced two years ago, provided hands-free calling. The second version added 911 Assist (crash notification) and Vehicle Health Report (online status of the car's systems); some people count this as more of a 1.1 version. The coming version adds the navigation, traffic information, and business search (yellow page listings), plus business news, sports scores, and weather information (sort of like what a car radio provides, only when you want it). You can issue voice commands such as "traffic to work" to receive, within the still-limited abilities of real time traffic information, information on delays.

While you can't upgrade a car that has the first or second version of Sync to get Sync 3 services, Ford says future services will be downloadable upgrades--although Ford's wording doesn't say that every future feature of Sync would work on Sync 3 hardware. That's important to users who see years-old technology that's locked into their cars without any chance of upgrade; it's most noticeable if you're driving a five-year-old-car with laughably rudimentary navigation that cost $2,000-plus and an iPod adapter that's just a line-in jack. Ford, through Sync, recognizes that automakers must work with the individual technology you have in your backpack or jacket pocket. And the downloadable-upgrades feature acknowledges the need to adapt as technology moves forward--not just when you buy your next new car.

Which Fords get Sync
The new Sync platform is on these 2010 model cars: Ford Focus, Fusion, Flex, Expedition, F150, SuperDuty, Sport-Trac, Edge, Escape, Explorer, Mustang, and Taurus; Mercury Milan, Mariner, and Mountaineer; and Lincoln MKS, MKX, MKZ, and Navigator. Some models such as the Ford Fusion / Mercury Milan twins, including the 40-plus mpg Ford Fusion hybrid, will be available as early as late winter. Because it's a new hardware package, the features set can't be retrofitted to existing Sync-package cars. Ford will still offer real navigation systems as well, shifting from Pioneer to Xanavi on most vehicles, for users who a big LCD and moving-map display.

Already Sync is helping keep Ford afloat. Ford's CEO Mulally noted that cars equipped with Sync sell twice as fast off dealer showrooms as Fords without Sync. Sync is integrated into the cost of upper- and mid-range Fords, Lincolns, and Mercurys. It's a $395 option on some mid-range and entry models, and not available on some of the most bare-bones entry models.

Sync is Ford's version of Microsoft's in-car telematics services. Fiat was the first to use it, in a 2006 package called Blue & Me, and Ford announced Sync in 2007. For the third version of Sync, partners include Microsoft, Inrix (a Microsoft spinoff) for real-time traffic information, TeleNav for navigation, Tellme (a Microsoft subsidiary) for voice services, M/A-COM for hardware components, and Airbiquity for car-to-phone connections.

What Sync 3.0 Isn't
Much as Sync offers, Ford has left some openings:

* Real navigation. Turn-by-turn with text prompts and spoken words is better than nothing, but it doesn't address the need for affordable navigation with moving maps. Most onboard navigation still costs $1,750 to $2,000, and the cheapest, from Hyundai, is $1,250. What's missing, obviously, is moving-map navigation that costs less than $500. If Garmin, TomTom, Magellan, Navigon, Sony, and others can do it for as little as $99 (as of the holiday time period) in portable navigation devices, why is integrated car navigation an order of magnitude costlier?
* Redirected cellphone navigation. Another option for quality navigation would be to redirect cellphone navigation, which typically costs $10 a month and may soon reach $5 a month, to an already integrated LCD on your dashboard. That level of openness isn't yet in Ford's plan, apparently.
* Real-time traffic that works. Nothing against Ford's partners, but even the best real-time traffic misses a lot of traffic in real time. You get advised of hour-long delays, but you miss a lot of accidents that slow traffic by, say, 15 minutes--just enough to make you miss your appointment. It will get better, but over years, not within months. Think of RTTI as gossip backed by statistics that's right more often than not, but never 100% believable.
* Secure Mayday calling. OnStar builds its cellphone into a secure location, usually the trunk, and it's likely to survive severe crashes, where an unsecured mobile phone used by Sync may fly around the car and not work after the crash. Also, an OnStar antenna has better range than a handheld phone's built-in antenna. But there's little or no data about the vulnerability of mobile phones in accidents. And when there is, the data should be correlated to the fraction of OnStar cars that are paying for the service. Example: OnStar phones may work 99% of the time in crashes, but only 50% of cars have OnStar service enabled after year one; but Sync-connected phones may work 90% of the time after crashes, and 75% of the phones are turned on and paired with Sync. So there could be two answers as to which phone saves more lives, assuming a passing motorist doesn't call 911 as well. For Ford, an interim solution might be a padded cradle and elastic strap in the console along with a charging plug.
* More powerful Sync hardware. The first two versions of Sync wowed customers, but the limited processing power was annoying. You had to work through a voice input menu tree--so for instance, when you were in navigation mode, you had to invoke the audio mode before issuing an audio command. Otherwise, "Play artist Lady GaGa" had no effect. For most users, it meant using the radio buttons rather than the voice prompts.
* Video. The Sync USB jack provides connections to 200 million music players, iPods as well as most other brands, and billions of USB drives that can hold MP3 or WMA songs. But so far there's no way to play all the movies you have on your iPod, either on a back-seat monitor or on a front-seat LCD screen that's polarized so only the passenger could see the entertainment.

Back to the Future
While Sync 3.0 provides new services for the U.S. market, it's also playing catch-up to Fiat's Blue & Me, which has offered navigation with its early releases. The initial Microsoft product, called T-Box internally (T for telematics) used voice input and offboard navigation, much as Ford will now use.

But Fiat's implementation chose to use a 2GB memory key with onboard address and navigation information, an intriguing choice since Europe's cellphone infrastructure is better than ours and has far fewer dead zones. When I asked Ford executives two years ago why they weren't matching Fiat's offering of navigation, Ford's answers were a combination of "wait and see" and "the U.S. market isn't ready for rudimentary navigation." In other words, the kind of navigation the U.S. market will be getting with Sync 3.0.

Sync 3.0 also represents a reputation resurrection of sorts for Ford's CEO from 1991 to 2001, Jacques Nassar, who talked about the car as a recurring revenue stream from telematics and infotainment devices and led Ford's into an ill-fated alliance with Qualcomm from 2000 to 2002, called Wingcast. It's back. Whether it's ever a meaningful revenue stream remains to be seen.
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