No. 2 auto parts supplier
Visteon Corp.(VC.N) said on Monday it is forming a new
operation focused on accelerating its multimedia products
The Dearborn, Mich.-based parts supplier said the new
Telematics/Multimedia business operation will be part of the
company's Comfort, Communication and Safety unit, which makes
up half of total sales. Telematics are in-vehicle, wireless
communication, safety and information systems.
"With the increased demand by consumers for telematics and
multimedia products, it is critical that Visteon create a
focused group that can leverage its engineering and technology
expertise to grow this business,'' Visteon Chairman, President
and CEO Peter Pestillo said in a statement.
Visteon's stock closed down 5/16 at $15-5/16 a share in
Monday trading on the New York Stock Exchange.
The new operation will concentrate on developing mobile
wireless and information, entertainment, audio, safety and
convenience products, the company said. Visteon cited a recent
study in which UBS Warburg estimated the worldwide end-user
telematics market is projected to grow to nearly $47 billion by
2010, up from an estimated $10 billion at the end of 2001.
Visteon officials didn't say what share of the market they
plan to aim for other than to say it would be "significant.''
Another major competitor in this area is former General Motors
Corp. (GM.N) parts unit Delphi Automotive Systems Corp.
As part of its efforts to grow its telematics business,
Visteon also said on Monday it has formed an alliance with
iBiquity Digital Corp., a new company being created from the
merger of USA Digital Radio and Lucent Digital Radio.
Visteon said it will take an ownership stake it wouldn't
identify in the new company, whose owners will include Lucent
Technologies Inc. (LU.N) and 15 of the nation's top 20 radio
broadcasters, including Viacom Inc.'s (VIA.N) Infinity
Broadcasting Corp. (INF.N) and Clear Channel Communications
As part of the deal, Visteon will develop a working
prototype radio using iBiquity's digital AM and FM broadcast
technology for incorporation into future radio platforms.
In addition, Visteon will make its Digital Signal
Processing technology available to select radio chip
manufacturers for sale to radio set makers.
Overall, Visteon said it has secured nearly $550 million of
annual, incremental telematics and multimedia business this
Customers including former Visteon parent Ford Motor Co.
(F.N), GM, and Japan's Honda Motor Co. Ltd. (7267.T) and Nissan
Motor Co. Ltd. (7201.T)(RENA.PA) have sourced such Visteon
products as navigation, communication, entertainment, in-car
computing and audio systems on several future vehicles, some in
the 2001 model year. It also is a supplier for Wingcast, the
recent telematics venture by Ford and Qualcomm Inc. (QCOM.O).
Visteon has partnerships with such firms as Bang & Olufson,
Sirius Satellite Radio Inc. (SIRI.O), Samsung Electronics Co.
Ltd., Microsoft Corp. (MSFT.O), Intel Corp. (INTC.O) and
Lernout & Hauspie Speech Products NV (LHSP.O).
Jim Wynalek will lead the new telematics operation as its
vice president and general manager. Prior to his new position,
he was Visteon's chief technical officer.
Also on Monday, Visteon said it will begin offering in
October in North America a portable navigation system offering
drivers the option of installing the system in any vehicle. In
a matter of minutes, drivers are able to disconnect, reconnect
and be on their way to the next destination.