Ford Appoints Apple Executive to Lead Software Subscription Services Division

Ford has recruited a prominent Apple executive to lead a fresh division focused on providing software-based subscription services to car owners.

The Dearborn, Michigan, automaker announced Monday that it has hired Peter Stern, who was Apple’s director of services. He will become the head of the Ford Integrated Services unit, which combines software and hardware into services.

At Apple, Stern oversaw Apple TV plus, iCloud storage, Apple Books, arcade and fitness operations and other businesses, Ford said in a statement Monday.

Stern started Monday and will report directly to CEO Jim Farley.

Stern also plans to expand Ford’s BlueCruise hands-free partially automated driving system, as well as productivity and safety services.

Asked if people are getting tired of paying for subscription services, Stern said people will buy individual services and bundles as long as they see value.

“When we do it right, customers don’t just sign up for individual ala carte services, I think we create service packages that make it really easy for customers to get the most out of their vehicles,” he said. .

Stern, who before Apple was Time Warner Cable’s chief product officer, said he was worried the company would ever exceed $100 a month per average user. “It was in the rearview mirror pretty quickly because of the value we were delivering,” Stern said.

Stern also said that when he started at Apple, it only had two subscription services, iCloud and Apple Music, but by the time he left, the services had more than a billion subscriptions.

“We know the playbook,” he said. “We have some great ideas about the services we need to offer.”

He said that he expects the security services to have many subscribers. For example, Ford recently introduced an SUV at a campground that recognized a bear and activated its horn and lights to scare it away.

Ford, which CEO Jim Farley said has 550,000 paying subscribers for software services with a 50 percent profit margin, has no immediate plans to spin off Integrated Services as a separate business and show its profit on the income statement. But that can be done later, he said.

He said the company will introduce a new vehicle electrical system in 2025, which will enable more software services. He said it will move to next-generation electric vehicles as well as combustion engine vehicles, such as the new version of the F-150 pickup truck.

Shares of Ford traded up slightly, hitting $12.18, during mid-day trading on Monday.