Philips Electronics was once one of the world’s largest manufacturers of television sets and video gadgets but today it all but admitted defeat, selling a key business and vowing to focus on healthcare and wellbeing.
The Dutch group’s sale of its audio and video business for 150 million (£128 million) to Japan’s Funai Electric is the latest step in a withdrawal from its former heartland of consumer home entertainment.
Philips had already spun off its troubled TV business last year, setting up a joint venture with Hong Kong-based TPV.
Chief executive Frans van Houten said the latest disposal was “taking another step in transforming Philips into the leading technology company in health and wellbeing”. Philips has been struggling for years to compete with Asian rivals such as Samsung, Sony and LG, which have been more innovative and whose goods are more competitively priced.
As well as healthcare and lighting, Van Houten wants to focus on more profitable areas such as basic household appliances — Philips makes toasters, shavers, juicers and coffee-makers. Funai Electric is set to keep the Philips brand as it will pay a “brand licence” fee.
Philips slumped to a 350 million loss for the last quarter, as it was hit by a European Commission fine related to a historic competition issue about cathode-ray tubes.