When Product Cycles Collide
Ford/Microsoft in-car OS deal kicks the tires of IT portfolio turnover.When I heard about the Ford/Microsoft announcement at this weeks Consumer Electronics Show in Las Vegas, my first thought was the radically different time frames of the consumer auto and the consumer electronics markets. Ive never kept a new car for less than six years, and my typical tenure for a car that I buy new is closer to fifteen yearsbut the oldest PC that I own and still actually use is only 8 years old, and that machine is only used when I need its support for a legacy serial-port application. Any notion of putting a more advanced operating environment into a car, it seems to me, must crucially depend on either a far-sighted and open-ended vision of a bump-free upgrade path, or on a modular hardware scheme that makes it easy to swap in a new boxpreferably with an industry-standard form factorto give updated functionality and speed to the functions of a touch-screen display, audio system interface and wireless connection hardware in a car thats just getting nicely broken in. Alternatively, and more alarmingly, the auto makers have looked over the fence at the short product cycles of industries like the cellular phone (typical replacement interval 18 months), and are coveting the opportunity to sell someone a new car every two to four years instead of every five to 15. This would attack a trend thats bound to be concerning the auto makers: In 2005, the median age of cars on the road in the United States was almost 9 years, up from 6.5 years in 1990 and 5.1 years in 1969. The auto makers are selling a better productmore efficient, safer, and more luxuriousfor a good deal less money, in terms of consumer buying power, than they did a quarter of a century ago, and its killing them. People are shopping more aggressively on price, reducing their brand loyalty, and keeping their cars longer.
The consumer computing industry is facing similar problems, with people tending to keep computers much longer than they once did, and buying new software only when its either required or practically free as part of a new-hardware purchase. But for now, at least, an uncomfortably lengthening product cycle for PC makers looks blissfully and lucratively short to auto makersand Ford may be jumping at the chance to add an ingredient to its cars that makes people itch for a new one several years sooner than they otherwise might.