Dutch manufacturing giant Philips (NYSE:PHG) announced on Tuesday that it has sold its consumer electronics business to Funai Electric (PINK:FUAIY) 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), Samsung and

Apple (NASDAQ:AAPL).

Philips’ decision to exit the consumer electronics market follows similar moves by other European manufacturers, including Siemens (NYSE:SI) and Alcatel-Lucent (NYSE:ALU). 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. For 2012, the company generated earnings of €231 million on revenue of €24.79 billion.