Ford Said to Drop Microsoft for BlackBerry QNX in Sync Units

Feb 23, 2014 10:29 am ET

(Updates with Ford response in fifth paragraph.)

Feb. 23 (Bloomberg) -- Ford Motor Co., struggling with in- car technology flaws, will base the next-generation Sync system on BlackBerry Ltd.’s QNX and no longer use Microsoft Corp.’s Windows, according to people briefed on the matter.

Using QNX will be less expensive than licensing Microsoft technology and will improve the flexibility and speed of the next Sync system, said the people, who declined to be identified because the decision hasn’t been made public. Ford has more than 7 million vehicles on the road with Sync using Microsoft voice- activated software to make mobile-phone calls and play music.

Chief Executive Officer Alan Mulally, who was said to be a candidate to become Microsoft’s CEO until early this year, has seen Ford slump in surveys by J.D. Power & Associates and Consumer Reports, with customers citing malfunctioning technology systems and touch screens. The second-largest U.S. automaker has said the quality of its vehicles has been “mixed” each of the past three years and fell short of its plan to improve those results in 2013.

Improving Sync is crucial for Dearborn, Michigan-based Ford to draw car shoppers who are increasingly looking to be connected at all times. In-vehicle technology is the top selling point for 39 percent of auto buyers, more than twice the 14 percent who say their first consideration is traditional performance measures such as power and speed, according to a study by the consulting firm Accenture released in December.

Apple, Google

“We do not discuss details of our work with others or speculate on future products for competitive reasons,” Susannah Wesley, a Ford spokeswoman, wrote in an e-mail.

Peter Wootton, a spokesman for Redmond, Washington-based Microsoft who works for Waggener Edstrom, declined to comment. Paul Leroux, a spokesman for QNX, declined to comment.

The Ford and Lincoln brands ranked Nos. 26 and 27 out of 28 brands in Consumer Reports’ annual auto-reliability survey released in October. While the Lincoln luxury line matched the industry average in J.D. Power’s Initial Quality study in June, the namesake finished 27th out of 33 brands.

Technology companies are competing to win business from auto makers as in-car technology becomes an increasingly important selling point. Google Inc. announced an alliance with General Motors Co., Honda Motor Co., Hyundai Motor Co. and chipmaker Nvidia Corp. in January to bring the Android operating system to cars. Apple Inc. is working with Bayerische Motoren Werke AG, Daimler AG’s Mercedes-Benz, Nissan Motor Co. and others to introduce its iOS operating system to cars with devices such as the iPhone.

QNX Software

BlackBerry’s QNX Software Systems can be found in cars made made by Volkswagen AG’s Audi unit and BMW, according to its website. QNX and Microsoft are the main suppliers of automotive operating system software, according to researcher IHS iSuppli.

BlackBerry, at the time named Research in Motion Ltd., bought QNX Software Systems for $200 million in 2010. In addition to its presence in cars, QNX technology is used to manage nuclear-power plants and by the U.S. military for unmanned aerial drones. Its customers include Cisco Systems Inc., General Electric Co. and Caterpillar Inc.

--With assistance from Hugo Miller in Toronto. Editors: Niamh Ring, Kevin Miller