Ford Motor Company Dives Into the Digital Arena

Ten years ago, the decision from Ford Motor Company (F) to get into the mobile app game (if “apps” had existed at the time) would have not only done nothing to boost the value of Ford stock, it would have raised investors’ eyebrows — why would an automaker be interested in getting into wireless communication devices?

Ford Motor Company Dives Into the Digital ArenaToday, however, the creation of a personal-assistant app from Ford is on the way, mostly to cheers.

The app, called FordPass, does a little of everything, from finding a parking spot to serving as a digital wallet to (eventually) serving as a ride-sharing platform.

Why, and more important, will it work? Incredibly enough, there’s actually a stroke of brilliance to the crazy idea, and it costs next to nothing to take the shot.

Introducing FordPass

Unveiled on Monday at the annual North American International Auto Show held in Detroit, FordPass is an app that… well, does several things, all of which are designed to make life easier for anyone who drives an automobile (whether or not that vehicle is a Ford).

FordPass — for the time being anyway — appears to be best suited for finding and even pre-paying for parking spaces, though that description doesn’t do the app justice. It would be more accurate to say the tool handles the logistics of annoying tasks like figuring out what to do with your car that needs to be left at an airport. Eventually, the same app will let you rent out your car while you’re not using it, or even let you hitch a ride to the airport.

The app also offers access to a service called FordGuides, which is essentially a concierge service initially aimed at driving assistance.

There’s even a virtual wallet. McDonald’s (MCD) and 7-Eleven will accept payments from FordPass right now, though more vendors are sure to be on the way.

Of course (and this is the one owners of Ford stock should like best), the app also offers more information about Ford vehicles, even allowing users to customize their own automobile.

Not as Crazy as It Sounds

Yes, it’s unfamiliar territory for Ford, and the upside of going to the trouble isn’t exactly clear — what’s really in this for Ford stock holders? It’s not as crazy or as pointless as it sounds, however.

To put it bluntly, anyone over the age of 35 (and this journalist most definitely falls into that category) likely has a “car companies should focus on making cars” mentality. Anyone under the age of 35, though, probably doesn’t remember a time when companies haven’t crossed seemingly strange lines.

Yes, there was a point in time when grocery stores and discount stores didn’t rent out space to banks. There was a point in time when the only thing Amazon.com (AMZN) sold was books. There was a point in time when Alphabet’s (GOOG, GOOGL) Google was just a search engine.

Those points in time, though, are surprisingly well in the past. Now any organization can offer any product or service, and up-and-coming 21st century consumers don’t balk.

Cases in point? Computer company Apple (AAPL) is making a self-driving car. Search engine giant Google provides you with office productivity software. Amazon.com will now deliver your groceries.

There are no boundaries any longer, and it just doesn’t matter.

With that as the backdrop, don’t think Ford can’t or won’t pursue the proliferation of FordPass. Indeed, look for Ford to become even more deeply ingrained in your daily, non-automotive life.

It was unveiled separately from FordPass, but points to the bigger direction Ford stock is pointed — the company wants your vehicle to also become the command center for your Internet of Things connected house.

With some help from Amazon, Ford is developing its specialized version of a voice-command platform called Wink, which will allow a homeowner to use their voice as a means of opening their garage door, remotely adjust a thermostat and more.

With many new cars already wired for the use of a driver’s smartphone, an in-car assistant connected to the rest of that driver’s digitally powered world was the next logical progression. Why not Ford?

It’s only a matter of time, though, before the lines between FordPass and Wink are blurred, and the car company becomes your personal assistant in ways that have nothing to do with your automobile.

Bottom Line for Ford Stock

The point is, while the old-school crowd may not care to see Ford Motor Company take on a project it doesn’t have any history or proficiency with, it doesn’t matter, because it can buy or hire that proficiency/history — Ford can make FordPass work.

That just leaves owners of F stock wondering if there’s any particular marketing advantage to FordPass.

There is.

Again, anyone over the age of 35 may not care about it, or even want it, but generation Y and millennials love their connectivity. In that these generations are the consumers that are going to power the economy in the future — and now — it’s wise to meet them on their terms, on their turf.

To be fair, the company probably doesn’t know exactly where all this is going. That’s ok though. The great part about software and apps is they can be updated, rewritten, repurposed, and redeployed in a matter of hours. The important thing for Ford and owners of Ford stock right now is, Ford planted a flag. Showing up is half the battle.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/01/ford-stock-fordpass/.

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