Why Ford’s Tiny Buyout Of Livio Could Be A Big Deal For Connected Cars
As acquisitions go, Ford Motor’s purchase of Michigan start-up Livio doesn’t amount to even a tiny drop in the bucket. Still, it has the potential to create ripples throughout the industry.
Ford paid less than $10 million — not even 0.2 percent of its 2012 net profit — to acquire the Ferndale, Mich.-based company whose software connects the apps on your smartphone to your car’s dashboard. Ford said the move will extend its leadership in the race to provide drivers with safe, seamless access to the electronic content they love while in their vehicles.
More importantly, however, the two companies plan to focus on developing an industry standard for smartphone-to-vehicle communications, a market that is expected to reach 21 million vehicles by 2018. The revenue potential is enormous, but the problem is that every automaker wants its own branded solution. That makes it tough for app developers, especially smaller ones, to play in the automotive market. A single vehicle interface standard would let developers write software faster and more efficiently, providing customers the apps they want to use more quickly. Livio software already is compatible with several commonly used apps and works with all major smartphone devices.
“At Livio, our philosophy is centered on bringing customers more connectivity with less hassle,” said Livio CEO Jake Sigal in a press releases. “We believe this partnership is an excellent match, as it will give us the ability to work with Ford to provide customers even more access to new technologies in the vehicle infotainment space.”
Livio, co-founded by Sigal and Massimo Baldini, will be a wholly owned subsidiary of Ford Global Technologies and will function as a separate department . The deal gives Ford access to a broad group of application developers, while enabling Livio to maintain its independent and entrepreneurial approach.
“Ford is acquiring Livio to advance connectivity for our customers and to lead the way in in-vehicle connectivity for the entire automotive industry,” said Bill Coughlin, president and CEO, Ford Global Technologies.