Ford's Foray Into the New Auto Space Frontier

The group, a compilation of Ford's most talented leaders in engineering, marketing and the like, already has filed for more than a dozen patents, Doug VanDagens, director of the new group, told the Free Press in a recent interview.

"They are just geeked," VanDagens said. "They are ready to go."

Fear of Falling Behind

The technology group's overriding purpose is to make sure Ford doesn't fall behind in the in-car computer revolution it helped launch in 2007 with Sync -- a Ford-branded wireless, hands-free communications and entertainment technology that runs on Microsoft's (Nasdaq: MSFT) Windows Automotive operating system.

The Microsoft technology, which has helped Ford win over younger consumers and get people to pay more for its cars and trucks, had been available in North America only on Ford, Lincoln and Mercury vehicles.

However, Ford is at risk of losing its edge. The Windows operating system for vehicles is now available for other automakers -- and Microsoft rivals are aggressively moving into the what they call the "auto space," as many consider the car to be the technology industry's next frontier.

What's more, rival General Motors (NYSE: GM) continues to offer new features through its well-known OnStar service.

Phil Magney, principal analyst with Telematics Research Group in Minnetonka, Minn., which was recently purchased by iSuppli, said that the race is on with "telematics," the name many use to describe the burgeoning world of in-car technology, and Ford is under pressure. His firm predicts that by 2013, just five years from now, more than 50 million vehicles will be on the road with sophisticated telematics systems like Sync.

"The technologies are becoming increasingly important," Magney said. "Their biggest risk is falling behind."

Mass Affordability

VanDagen's new department, which was created just a month ago, will oversee Ford's Sync development, as well as Sirius TravelLink, Ford Works Solutions and Sync 911 Assist and Vehicle Health Report, which is to offer detailed diagnostics reports.

Strategically, Ford has already made some important decisions on which way it is headed with telematics.

Foremost, VanDagens said, Ford will be focused on making sure all future technologies are affordable for the masses. The last thing consumers want, he noted, is another bill.

That means Ford might be exploring how to work more advertising into its telematics systems to cover costs -- without offending consumers. VanDagens said Ford might consider a premium service that would be advertising-free.

Ford's telematics strategy will also be focused on leveraging the developments and technologies already present in handheld devices and bringing them into the car in a way that minimizes distraction and allows for total voice control. That means Ford will focus more on the connections part of the technology with supplier partners than on creating many of its own technologies.

One thing complicating that effort, aside from the challenges of trouble-free voice recognition software, is the lack of standards for graphics.

Unlike Bluetooth , which has simplified the transmission of wireless signals, there is no standard among technology companies for sharing graphic images from, say, phone to in-car monitor.

"They are all over the map with sizes and formats and moveable images," Magney said.

Magney said the telematics industry is trying to resolve this very complicated problem.

While VanDagens could not discuss specifics of the projects his team is working on, he hinted that Ford is working on technologies that might even be applicable outside of the vehicle.

If the circumstances are right, Ford might even consider selling some of its future technologies to other automakers after an exclusivity period of, say, 18 months.

Ford's biggest goal is to remain out front with the hottest in-car technology that it can call its own.

"We'd like to have exclusivity," VanDagens said.