Ford and GM Chase the Technology Curve

Posted:01/09/13
By:Dan Connelly

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The future of automobiles may well be upon us. It might not be long before you can access your Facebook (FB) or Gmail (GOOG) account directly from your dashboard. On Monday, both General Motors (GM) and Ford (F) announced that they were inviting developers to generate applications, or apps, like those you may find on a Smartphone for their 2014 line of vehicles.

This is significant. Before Monday’s announcement these companies had operated a closed system for app development, with GM only offering select groups the opportunity to create apps customized for their vehicles. Additionally, Ford said that it would open up access to its specialty software so that it could expand the base of apps available on its fleet.

When apps first hit the technological scene a few years ago many developers rushed to create customized apps for cars, but many failed to translate to safe and relevant usage for drivers on the road. These companies hope opening the system will mark a shift in vehicle based app generation and motivate developers to create products that are specifically functional on the road.

Looking Ahead

The long-term goal is to create an interface that allows users to bypass plugging in their smartphones and allow drivers to download apps directly on their dashboard, just as consumers today are able to bypass computers and download apps directly on their smartphones. Additionally, from a business perspective, auto companies hope that this development will keep their products relevant farther into the future. “We want vehicle owners to be able to download apps two or three years after the purchase,” said GM’s head of application development, Steve Schwinke.

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For auto companies going forward, whoever is able to create a modern and relevant experience for their users will gain a significant competitive advantage. The integration of smartphones and applications with the vehicle itself is a huge part of the movement. Because of the advantage both Ford and GM are mandating that their app developers do not share their products with other car companies.

Do you think these developments could be significant enough to effect sales in the future? We have compiled a list of leading auto companies to help you start your research.

1. General Motors Company (GM, Earnings, Analysts, Financials): Operates as a global automaker. Market cap at $45.99B, most recent closing price at $29.37.

2. Ford Motor Co. (F, Earnings, Analysts, Financials): Develops, manufactures, distributes, and services vehicles and parts worldwide. Market cap at $49.95B, most recent closing price at $13.35.

3. Toyota Motor Corporation (TM, Earnings, Analysts, Financials): Engages in the design, manufacture, assembly, and sale of passenger cars, minivans, and commercial vehicles. Market cap at $161.94B, most recent closing price at $93.93.

4. Tesla Motors, Inc. (TSLA, Earnings, Analysts, Financials): Designs, develops, manufactures, and sells electric vehicles and advanced electric vehicle powertrain components. Market cap at $3.83B, most recent closing price at $33.68.