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  (Source: ceoworld.biz)
Cedes control of loss-making TV unit to Hong Kong computer monitor manufacturer

Philips, once a leader in the market, is turning down the dial on its losing television business according to Reuters and Bloomberg.

Frans van Houten, a "restructuring expert" and newly appointed CEO of the Amsterdam-based company, has implemented a plan to hand over control of the Philips' TV business to TPV, a Hong Kong-based monitor maker that controls 33 percent of the global computer monitor market. The joint venture grants TPV control of the business, with a 70-percent ownership stake. Philips will claim the remainder, but it has the option to sell out. According to Bloomberg, it will receive royalty payments from TPV of at least $72 million annually starting in 2013.

The deal is an effort to boost the Dutch company profits. Philips lost 87 million euros in the first quarter from its TVs, which it first manufactured in 1928.

The value of the deal has not been disclosed, but all 3,600 Philips employees who currently work in the TV business will be transferred to Hong Kong. 

This is not the first time Philips has done business with TPV. According to Bloomberg, it sold a majority stake in PC monitors to TPV for $358 million in 2004. \

And the deal accelerates Philips' focus on a few key industries: lighting, health-care products, and smaller consumer electronics such as toothbrushes and electric shavers. 

Analysts and markets warmed to the joint venture. Philips stock rose 2.6 percent -- the most since January. "It's a major positive," ING analyst Sjoerd Ummels told Reuters. "It's clear (Van Houten) will address laggard businesses."

"It is a positive surprise Frans van Houten has fixed this problem so fast," Theodoor Gilissen Bankiers Analyst Jos Versteeg told Bloomberg. "Van Houten certainly isn’t wasting any time."

The announcement came the same day that the company also reported its first-quarter earnings. Net income was down from 200 million euros last year to 137 million in Q1 2011. 

Philips was one of the last surviving mass-market European television manufacturers -- a niche now dominated by Germany's Loewe AG and Denmark's Bang & Olufsen AS. Philips, though, struggled to compete with Asian manufacturers such as Samsung and LG Electronics.

"We are not yet firing on all cylinders...There's much unlocked potential in Philips," Van Houten told Reuters, hinting that there may be further divestments in the future.



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RE: Well there you go
By kleinma on 4/18/2011 12:40:11 PM , Rating: 3
I took apart a Sony Vaio laptop because of a bad screen, and turns out the LCD was made by LG.. guess sony gets a better deal using someone elses technology instead of their own...


RE: Well there you go
By Solandri on 4/18/2011 2:24:46 PM , Rating: 3
The vast majority of laptop LCDs are made by Samsung, LG, CMO (Chi Mei Optoelectronics), and AU Optronics. The latter two own most of the low-end panel business, so they show up even in Samsung and LG products.

Sony in particular uses their own panels (actually manufactured at a plant co-owned and co-operated with Samsung) only in their high-end laptops and TVs.


RE: Well there you go
By Scootie on 4/18/2011 3:19:34 PM , Rating: 2
Im not sure what do you mean by Sony using their own panels in high-end products but recently I had to disassemble a Sony laptop worth of ~1500 euro or maybe a little more and it had an AU Optronics panel and hynix rams(the later are counted as cheap/not the fastest memories where I work) in it. If that 1500 euros is not high-end laptop I dont know what is then. :)


RE: Well there you go
By smartalco on 4/18/2011 5:28:27 PM , Rating: 2
By 'high end' he meant their multi-thousand dollar (or euro) Bravia TVs. I don't think Sony makes much of anything in the Vaio line except the frame/case and maybe the motherboard (more likely contracted).


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