Mobile Multimedia First Example of New Delphi Business Line Model
28 March 2000
Mobile Multimedia First Example of New Delphi Business Line Model
Booked Business Rises by $400 Million in 60 Days to $2.9 Billion;
Further Evidence Delphi is Winning in New Economy
TROY, Mich., March 28 Delphi Automotive Systems
today announced the formation of a new business line structure to
accelerate sales in high-growth markets. Terming them "aggressive growth
business lines," J.T. Battenberg III, Delphi chairman, CEO and president,
announced details of the structure and disclosed that Delphi's mobile
multimedia (MMM) business line would be the first business placed in the new
structure. He said the move would intensify the company's focus on the mobile
communication and multimedia market.
According to Battenberg, Delphi's portfolio of aggressive growth business
lines will include core automotive technologies, non-core automotive products
and industry-related service businesses.
"The creation of a new aggressive growth MMM business line, one of our
core automotive technologies, will help us capture significant share in a
market that is growing at 25 to 30 percent annually," said Battenberg. "With
annual revenue today in excess of $200 million and business booked approaching
$2.9 billion, we are confident there is great potential for Delphi to expand
in this fast-growing mobile multimedia market."
"Beyond mobile multimedia, we are evaluating several additional
technologies that are strongly positioned to win, creating new business
opportunities for Delphi. These opportunities, which also have the potential
to generate 25-30 percent annual growth, will become aggressive growth
business lines for Delphi. In addition to these technology-based business
opportunities, Delphi also expects to develop industry-related service
businesses," he said.
"Managing our core automotive, non-automotive and service business lines
separately will enable rapid product development to speed market readiness and
position Delphi to capitalize on high-growth market opportunities as this
industry takes advantage of new economy market opportunities. This will help
solidify Delphi's overall market leadership position as a premier automotive
systems and technology company," said Battenberg.
"In the near-term, we expect non-core products and industry-related
service units to provide value creation opportunities, including the potential
for public offerings or other means to create shareholder value," said
Battenberg.
The newly created MMM business line will capitalize on Delphi's successful
launch of its Communiport(R) brand of integrated mobile multimedia (MMM)
technologies and the industry-wide demand for new in-vehicle Internet,
telematics, entertainment and mobile communications technologies.
"In June 1998, we launched our mobile multimedia business from our
development lab," said Dave Wohleen, Delphi executive vice-president and
mobile communications and electronics sector president. "By January 2000,
just eighteen months later, we had won $2.5 billion in new booked business.
Today, we expect calendar year 2000 sales of $200 million with five major
customers, up from $50 million in 1999. In addition, business booked now
approaches $2.9 billion and we have seven significant customer contracts for
Communiport(R) technologies.
"We believe our quick success illustrates three points: First, Delphi's
speed to market is demonstrated by our strong market presence built in the
last 18 months. Second, we have an enormous competitive advantage with our
in-house electronics and vehicle integration expertise. Third, this market is
unique and evolving rapidly, so it makes sense for us to create a separate
business line with a singular focus toward capitalizing on this growth
potential," said Wohleen.
"While our accomplishments in the last 18 months are strong, the MMM
business line will now operate with even greater freedom to more quickly
capitalize on market opportunities. Their priorities are clear: to support
existing customers, add new customers, add technical capabilities and secure
Delphi's unquestioned leadership in this market," said Wohleen.
"The value of this business line will grow rapidly as we aggressively
partner with related technology and service companies to bring an even broader
mobile multimedia portfolio to the original equipment automotive, automotive
aftermarket and commercial truck markets. We expect to announce partnerships
in the next few months, thereby demonstrating our ability to tap the growth
potential of this business, as we link home, office and automotive
environments," he said.
The newly formed aggressive growth MMM business line will publicly report
its first quarter sales in April, 2000, and will report sales and operating
income beginning with the second quarter of 2000. The MMM business line will
report to the company's Electronics and Mobile Communication Sector.
About Mobile Multimedia
The automotive mobile communications and multimedia market includes:
* smart radios in the center console with integrated radio and audio
controls, satellite reception, navigation, cell phone access, e-mail and
Internet browser functions through advanced user interfaces such as flat panel
displays, voice recognition and text-to-speech.
* telematics systems which combine global positioning satellite (GPS)
functions with cell phones for direct communications with call centers for
specialized services.
* rear seat entertainment systems which provide live TV, games and DVD
movies on large rear screen displays with audio headsets.
About Communiport
Delphi's Communiport(R) system integrates voice-activated, hands-free
operation of personal computer, communications, Internet browser, multimedia
entertainment and cellular phone technology. The system simplifies use of
these technologies while driving, more safely enabling new levels of
entertainment, productivity and connectivity as technology users move from
their home or office into the vehicle.
About Delphi Automotive Systems
Delphi Automotive Systems, headquartered in Troy, Mich., USA, is a multi-
national leader in transportation and mobile electronics components and
systems technology. Delphi's three business sectors -- Dynamics & Propulsion;
Safety, Thermal & Electrical Architecture; and Electronics & Mobile
Communication -- provide comprehensive product solutions to complex customer
needs. Delphi has approximately 214,200 employees, and operates 178 wholly
owned manufacturing sites, 41 joint ventures, 53 customer centers and sales
offices and 27 technical centers in 39 countries. Regional headquarters are
located in Paris, Tokyo and Sao Paulo, Brazil. Delphi can be found on the
Internet at http://www.delphiauto.com.
Forward-Looking Statements
This press release, other than historical financial information, contains
forward-looking statements that involve a number of risks and uncertainties.
Important factors that could cause actual results to vary materially from
those anticipated in the forward-looking statements are set forth in Delphi's
Securities and Exchange filings, including without limitation, Delphi's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999.