Philips Ditches Consumer Electronics

by Christopher Freeburn | January 29, 2013 10:00 am

[1]Dutch manufacturing giant Philips (NYSE:PHG[2]) announced on Tuesday that it has sold its consumer electronics business[3] to Funai Electric (PINK:FUAIY[4]) of Japan.

Investors liked the news, sending Philips shares up more than 2% in Tuesday morning trading.

Included in the sale are Philips’ audio, video and related accessory products, which represent the remains of the company’s once-primary electronics business. Funai paid $201.8 million for the assets and a license to the Philips brand name, the Wall Street Journal notes.

Once a dominant player in the worldwide consumer electronics market, Philips, which invented the audio-cassette, stumbled in recent years, facing rising competition from digital product producers like Sony (NYSE:SNE[5]), Samsung and Apple (NASDAQ:AAPL[6]).

Philips’ decision to exit the consumer electronics market follows similar moves by other European manufacturers, including Siemens (NYSE:SI[7]) and Alcatel-Lucent (NYSE:ALU[8]). The company will now concentrate on medical equipment and lighting products. It will continue to produce certain consumer products like coffee-makers and electric razors.

The company posted a fourth-quarter loss of €358 million, driven by restructuring charges and a €509 million fine from European regulators over alleged collusion to manipulate TV prices[9]. For 2012, the company generated earnings of €231 million on revenue of €24.79 billion.

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