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Former Microsoft CEO Steve Ballmer with Ford boss Alan Mulally
Former Microsoft CEO Steve Ballmer with Ford boss Alan Mulally

Is Microsoft’s relationship with Ford fraying?

That’s one way to read a report from Bloomberg today which notes that the Ford is planning to dump Microsoft in favor of BlackBerry for the auto maker’s next-generation Sync in-vehicle technology system.

That would be a high-profile loss for Microsoft, which under Steve Ballmer, who left the CEO post earlier this month, cultivated tight relations with Ford and other auto makers. Ballmer’s father was an automobile exec at Ford.

The fact that Ford boss Alan Mulally was reportedly in the running for the top post at Microsoft also makes the news especially painful for the software giant.

Citing people familiar with the matter, Bloomberg reports that Ford, which has experienced speed and reliability issues with the Sync system, plans to switch to BlackBerry’s QNX technology, which is used to power in-vehicle systems for BMW and Volkswagen. BlackBerry bought QNX Software in 2010 for $200 million.

About seven million Ford vehicles have Sync embedded, and it represents Microsoft’s largest customer in the expanding automotive business, Bloomberg reports.

The news comes at an inopportune time for Microsoft. At the Mobile World Congress in Barcelona today, Microsoft boasted that its Windows Phone operating system has surpassed BlackBerry, a comment which reportedly drew snickers and laughs from the journalists in the crowd. In the mobile phone business, Microsoft and BlackBerry are currently well behind Android and Apple’s iOS, which now hold the lion’s share of the mobile market.

Shares of BlackBerry are up more than eight percent on the Ford news, giving the company a $5 billion market value. Representatives from Ford and Microsoft declined to comment when contacted by Bloomberg.

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