Home entertainment exit for Philips
Dutch electronics giant announces refocus towards healthcare and home appliances, in order to cut costs
Philips, the company that invented the audio cassette 50 years ago, has announced plans to sell off its loss-making home entertainment business in an effort to reduce costs and to concentrate on healthcare and the more profitable home appliance market.
The Dutch firm says it hopes to receive more than €150m for its audio and DVD arm, as well as licenses, in a sale to Japanese company Funai Electric. The announcement came as the Philips revealed losses of €355m for the last quarter of 2012.
Last year, the company sold off its struggling television business to Hong Kong’s TPV in order to create greater efficiencies after a difficult year, which was blamed on the internet and competition from Asia.
Chief Executive Frans van Houten told reporters: “The market in this area [consumer entertainment] has shifted so much to the internet and mobile devices, and with so many Asian competitors in it, we feel we can no longer distinguish ourselves through innovation. It’s a mature market and we need to move on.”
The company’s new focus will be on healthcare equipment, as well as its popular shaving and toothbrush products.
