Philips abandons its heartland in consumer electronics market
Tuesday 29 January 2013
Philips Electronics, once one of the world's biggest manufacturers of TV sets, has sold its audio and video business in a symbolic move as it completes the withdrawal from its former heartland of consumer home entertainment.
Frans van Houten, chief executive, said the €150m (£130m) sale to Japan's Funai Electric was "an important step in transforming Philips into the leading technology company in health and well being". Funai Electric will pay a licence fee to keep the brand.
Philips had spun off its troubled TV business last year. It has sold other businesses such as its TV set-top box operation to Pace in 2008. The Dutch group has been struggling to compete with Asian rivals such as Samsung and Sony, which have been more competitive in terms of both price and innovation. It has also suffered a long line of glitches, from the Video 2000, its attempt to update the VHS video, to the Laser disc, phased out by the start of the last decade with rise of DVDs.
Mr Van Houten wants to focus on profitable areas such as basic household appliances, healthcare and lighting. Philips slumped to a €350m loss for the last quarter.
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