Philips Departs Consumer Electronics Market
January 29, 2013 1:11 PM
comment(s) - last by
It will focus on health and lighting products
Philips Electronics said it's leaving the consumer electronics market after facing consecutive losses and failing to keep up with competitors.
Philips sold its audio, video, accessories and multimedia business to Japanese company Funai Electric Co. for $201.8 million USD. It was paid in cash and a brand-license fee.
Philips was once a big player in the consumer electronics ring. It was the biggest suppliers of radios in the 1930s, the inventor of the audio cassette in the 1960s, created the first videocassette player in the 1970s and released the compact disc in the 1980s.
However, we've moved into an era of digital, streaming entertainment and Philips just can't keep up. The company has had a hard time competing with the likes of Apple and Samsung when it comes to consumer electronics like
“Our consumer lifestyle business was margin dilutive to the group, so it was time to decide to move away from consumer electronics,” said Frans van Houten, Philips’s CEO.
“Since we have online entertainment, people do not buy Blu-ray and DVD players anymore."
For Q4 2012, Philips' net loss was €358 million ($482 million USD) compared to a loss of €162 million ($218 million USD) in Q4 2011. The company had to take a restructuring charge of €380 million ($512 million USD) as well as a €509 million ($685 million USD) for a fine related to European television market manipulation in the 1990s.
However, Philips is doing quite well in the medical equipment and
. For Q4 2012, health care order intake increased 4 percent while lighting also grew 4 percent.
Last October, Philips introduced
"Hue" LED bulbs
that offer limitless colors and can be controlled from an iPhone. A starter kit with three bulbs starts at $199.
Philips' 2013 goals include a 4 to 6 percent revenue growth and a 10 to 12 percent margin for earnings before tax, interest and amortization. By 2014, the company hopes to have a savings of €1.1 billion. At the end of 2012, Philips had €471 million saved.
The Wall Street Journal
This article is over a month old, voting and posting comments is disabled
1/29/2013 1:58:01 PM
Philips has been turning out electronics junk for the better part of the last 10 years. They need to stick to their core competencies ... and consumer electronics is not one of them.
RE: Good Riddance....
1/29/2013 2:17:11 PM
I agree, Philips hasn't made a solid CE product in a long time. I lost faith in them entirely after my Ambilight LCD TV had two recalls.
RE: Good Riddance....
1/30/2013 8:38:42 AM
I would have to disagree, at least on 1 side of the CE market from Phillips:
With all of the options out there to have an iPhone dock, this was probably one of the BEST purchases I have ever made for an Android dock. The Sound quality is great (not the greatest...just really, really good for the size and cost) and all of our Android devices work great with it - especially since you can rotate and slide the connector into the position that you need.
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