Microsoft Can Still Fight for its Place on Ford Dashboards

Last week, Microsoft seemed to have lost control of its long-running Ford contract. With the rumor debunked by Ford itself, Microsoft is one of the Dow's strongest stocks today.

Feb 28, 2014 at 2:00PM

Fool Flickr Ford F
Ford is putting Microsoft software in infotainment options when you buy this F-350 truck today. The next generation of Fords may still come with Microsoft inside.

A week ago, rumor had it that Ford (NYSE:F) isn't just looking for a new infotainment systems provider, but that it had already decided to boot out incumbent SYNC system builder Microsoft (NASDAQ:MSFT) in favor of a QNX-based alternative from BlackBerry (NASDAQ:BBRY).

The rumor had some credence because Ford owners have not been happy with their Microsoft-powered SYNC systems for some time, and QNX already comes factory-installed in high-quality vehicles from BMW and Audi, among others.

Microsoft investors took the potential bad news to heart, and the stock underperformed the rest of the Dow Jones Industrial Average (DJINDICES:^DJI) as the rumor made the rounds.

MSFT Chart

MSFT data by YCharts.

But yesterday, CNET scribes snuck up to Ford representatives attending the Mobile World Congress in Barcelona, and asked them point-blank about the future of SYNC infotainment systems.

"SYNC 1 and 2 was done with Microsoft but we are not married with them. For us, it's a supplier, so every time we keep evaluating is it the right partner," said Pim van der Jagt, managing director at the Ford Research Center in Aachen, Germany.

But Microsoft is not out of the running for Generation 3 yet, and BlackBerry is most certainly not the anointed replacement -- yet, anyway. "We are spec'ing out our requirements for the next generation: what we want to do, what features we want to add, what functionality. Then you go through a normal supply selection process. Those requirements for the next generation get sent out to everybody ... and they come back with offers," van der Jagt clarified.

So BlackBerry is just one of several names under consideration for the next SYNC design, and Microsoft is actively bidding on the contract.

The market reaction to this bit of investigative reporting was swift and strong. Both stocks decoupled from a moderately positive day on the Dow and other major market trackers: Microsoft is skyrocketing and BlackBerry investors are dumping shares (albeit on low volume).

MSFT Chart

MSFT data by YCharts.

Like Microsoft, BlackBerry is still in the running. But the Ford contract isn't the slam-dunk win that speculators saw in last weekend's Ford rumors. That's yet another reminder that rumor-mongering isn't a great basis for investment strategies.

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Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford and Microsoft. Try any of our Foolish newsletter services free for 30 days.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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