How Microsoft Could Boost Ford

'Game-Changing' Sync Phone and Music System Exclusive to Automaker

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DETROIT ( -- Ford Motor Co. has a potential "game-changing" gamble on its hands -- and less than two years to play its cards.
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The website targets Gen Y.

The clock is ticking for the automaker's digital in-vehicle system created with Microsoft, called Sync, which is exclusive to Ford until 2009. The system, rolling out this summer, offers hands-free calling, audible text messages and voice-activated music by integrating with cellphones, iPods and MP3 players. It will be in "relatively strong demand," said Phil Magney, president of Telematics Research Group, who predicts the top 10 auto companies will offer similar systems by 2010.

"By 2020," he said, "all car companies will have it."

Tipping the scales
Before that window closes, Ford must make the most of a competitive advantage. "Sync can be a tiebreaker" for consumers considering a rival brand along with Ford, Lincoln or Mercury, Mr. Magney said. "We have reason to believe Sync could be a game-changing technology" to woo buyers to Ford products, a spokesman for the automaker said.

The marketer has started by chasing tech-savvy Generation Y prospects with the demonstration-heavy website, handled by Avenue A/ Razorfish, New York. The digital shop, which had Ford on its roster, is part of Microsoft's planned $6 billion bid to buy parent aQuantive, announced in late May.

But Ford isn't betting on just Gen Y, in part because Sync, available first on the youth-targeted Focus small car, will also be offered on premium-priced models such as Lincoln's MKX and MKZ, a spokesman said.

A big part of the target will be a group Ford internally calls "tech-ploiters" -- consumers who don't love technology for the sake of it but are the first to buy new products that make their lives easier. Within the "tech-ploiters" are two main groups Ford expects to attract. The first is "road warriors," or drivers who spend a lot of time traveling, who will appreciate the ability to talk on the phone, use call waiting and have text messages read to them with the touch of a button on the steering wheel. The second is moms, who like the idea of music connectivity and the ability to choose songs or artists without having to let go of the wheel.

Campaign in the works
Key to Ford's strategy will be pricing. The carmaker is still wrestling with whether to make Sync an option or standard on a dozen of its 2008 models. Sync needs to cost $500 or less, because for that amount, drivers can buy their own add-on gizmos that offer the same capabilities, Mr. Magney said.

Ford isn't yet talking about creative, which WPP Group's Team Detroit is working on. The spokesman, however, said it would be "a typical full launch" that will encompass TV ads, print, online and events.

Meanwhile, Ford Motor has struggled to get its six-year-old revival plans in gear. The corporation reported improved global revenue for the first quarter of $43 billion vs. $40.8 billion a year ago and a smaller net loss of $282 million as compared with $1.4 billion for the same period a year ago.

Ford is still struggling in its home North American market, where its pre-tax loss was $614 million in the first quarter. The automaker said its U.S. sales slid 12% through May compared with the first five months of 2006, to 1.1 million vehicles.

It does, however, look as if Ford is moving the needle of consumer perception, at least when it comes to quality. The automaker captured the top spot in five vehicle-model segments -- the most of any carmaker -- in consultant J.D. Power & Associates' recent annual Initial Quality Study.
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