Ford Sync Challenges Industry, Ignites Catch-Up Race

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The Ford Sync, a popular $400 factory radio co-developed with Microsoft, has established Ford as the leader in voice recognition and has ignited a race by aftermarket and OEM suppliers to catch up.

Pioneer told TWICE it will extend voice recognition beyond a single add-on navigation device — the AVIC-F500BT, planned for later this year — to a line of navigation products to be announced at its April dealer show.

Alpine said it has a development team in Torrance, Calif., working on voice recognition and said the Sync is speeding up research in the field by all suppliers. The Sync “has broken a barrier ... There have been several attempts, both aftermarket and OEM, with voice recognition, all of which were OK, but not necessarily great. Has it caused everybody to accelerate things? Absolutely,” claimed Alpine marketing VP Steve Witt.

Other car companies are also reportedly scrambling to catch up with the Sync, which has “trumped” the industry by offering lower-cost radios that lets a user play music from an iPod or cellphone through the car's sound system, and to call up music on these devices by simple voice command. Users can also place and receive calls by voice command, access tracks on a CD and even ask to have their text messages read aloud.

Some other weapons in Ford's arsenal include the Sync's availability on budget-priced cars as well as expensive vehicles, and the fact that the Sync is very heavily advertised. Vehicles with Sync sell about twice as fast as those without it, said the company, and Ford expects to hit sales of 1 million units by early 2009.

“That's a million units that could have potentially gone to the aftermarket,” said Phil Magney, co-founder of research group TRG Minnetonka, Minn. He added, “Yes, Sync is the talk of the town right now because it appears to be a very successful product with the right combination of features, and at a very competitive price.”

Research firm iSuppli said the Sync has “trumped the industry” with its “elegant, innovative and inexpensive approach to vehicle infotainment,” according to analyst Richard Robinson.

Retailers are equally impressed. “The No. 1 most talked-about automotive gadget right now is the Ford Sync. We need aftermarket manufacturers to come out with these solutions,” said John Haynes, product manager for Al & Ed's Autosound, Van Nuys, Calif.

One reason Ford beat other suppliers to market in voice recognitsion may be its deep pockets. Some of the same technology in the Sync is available to the aftermarket, but “it's a little expensive,” said Kenwood consumer electronics senior VP Keith Lehmann, who expects it to become cheaper in the near future. “As memory and processor speed come down in price, we'll be players as well,” he said.

But some retailers note that the aftermarket may have dropped the ball in innovation. As Dan Jeancola, merchandising senior VP for Seattle-based Car Toys, stated, the aftermarket has been “challenged” in bringing out “exciting core car audio products” that could “bring people into our showrooms. Add to that the lack of national advertising promoting any type of car audio products, and you have the primary reason the industry is having a tough time over the last few years.”

Ford would not release advertising expenditures for the Sync but one industry member estimated it spent roughly $250 million during the Sync's first four months.

iSuppli said the effect of the Sync on the aftermarket will become apparent over the next 18 months, but industry members hope the Sync' popularity will float all boats.

“Not everybody is going to run out to buy a Ford just because of the Sync. But everybody whose curiosity was sparked by the commercial will now be tempted go out and find something for their own vehicle,” Jeancola said, noting, “Add to it an economic turndown in many parts of the country — people are not buying new cars and new homes but improving the ones they own and that's a good thing for our industry.”

Mike Hedge, VP for Bluetooth supplier Parrot, said, “There are 230 million vehicles on the roads; a million cars is a drop in the bucket.”

Kenwood said its dealers claim consumers are coming into the stores asking for a Sync-type of product, and Lehman suggests dealers be prepared to demonstrate stereo Bluetooth connections and streaming music from a cellphone in response. He reminds retailers that many people think of Bluetooth only for hands-free calling.

Eventually, other car companies are expected to offer advanced products like the Sync. Analysts note that Ford's exclusive agreement with Microsoft expires in approximately six months. iSuppli's Robinson said, “Without question, the Sync caused some industry players to scratch their heads and say, 'Why didn't we see this giant gorilla on the side of the room?' … It's such an obvious thing now in hindsight. It's extremely well conceived as a product.” He added, “A company like General Motors would be playing catch up for a while.”


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