DETROIT – Despite some reports to the contrary, telematics still is a growth industry – it just has undergone a change in focus, says Jeffrey J. Owens, Delphi Corp. vice president and president-Delphi Electronics & Safety.

Owens admits the predictions of four years ago that telematics would be in 50% of vehicles by 2006 was a “broad overstatement,” with little chance of coming true. The level likely will be closer to 25%, he says at a Convergence 2004 press conference here.

The early projections were based on the expectation that safety and security systems, such as General Motor Corp.’s OnStar, would be on every vehicle, Owens says.

That is not proving to be the case, in part due to the cost of hardware and services. But Delphi, a leader in integrating electronics into vehicles, remains bullish based on the exploding growth of entertainment and information systems.

Jeffrey J. Owens

Day-to-day information needs and entertainment have accelerated, says Bob Schumacher, business line executive-Wireless Products. “Satellite radio is exploding.”

Delphi has reached the 3 million mark for production of satellite radios.

“I think there’s still potential, despite the stall,” Owens says of the future of telematics. “It truly can be out of this world.”

Electronics represent 22%-30% of the total value of a vehicle today. There are more than 25 microprocessors on the average luxury car, about 1 million lines of software code on a midsize car and as many as 3 million lines of code on a luxury vehicle. A small car could have an integrated circuit in a module containing 14 million transistors on a single chip.

The supplier has 1,000 software engineers working on automotive solutions and is producing 1 million integrated circuits per day. Delphi is capable of producing about 30% of its own integrated circuits, Owens says.

The number of software employees has been increasing, but the supplier also has been able to do more with fewer engineers, Owens says.

Delphi is spending about $120 million annually on software development to keep up with the amount of software on vehicles, which continues to grow by 20% a year and is expected to maintain that growth curve.

Cost is going up about 10% a year to meet that demand, Owens says.

In terms of market share, Owens says Delphi has about 40% of the adaptive cruise-control market; 15% of the airbag and seatbelt market; 25% of the overall restraint market.

apriddle@primediabusiness.com