Aug 16, 2001 video recording and playback are rapidly emerging, Philips' Consumer
Electronics Mainstream division is to refocus its VCR activities.
Following expansion in promising digital consumer electronics product
areas such as digital video and optical disc technologies (DVD), the
mass manufacturing of VCRs for the European market will be outsourced
to Funai Electric Company, of Japan, the world's largest manufacturer
of VCRs. Philips will scale down its own development activities for
video tape recorder technology and will concentrate its resources on
marketing and sales.
The market for analog video recorders has transformed into a mature
market with changing business characteristics. This has led to a
consolidation process with the center of gravity in Asia.
Guy Demuynck, CEO of Philips Consumer Electronics Mainstream, says:
"The growth in the global consumer electronics market is slowing down.
Philips is holding a strong top three market position for video
recorders and TV/Video combis worldwide, with a clear number one
position in Europe. To safeguard this leading position we decided to
expand our cooperation with Funai."
Currently, video recorders are manufactured by Philips in Austria
(Vienna) and Hungary (Szekesfehervar). The industrial activities for
TV/Video combis and the growing industrial activities for DVD will
remain in Szekesfehervar.
Between now and mid next year, these measures will lead to a headcount
reduction of approximately 1,000 of which 850 are related to the VCR
activities in Vienna. The latter is part of an overall industrial
restructuring program in Vienna leading to a loss of 1,200 jobs. The
related restructuring charge is included in the figures for the second
half of this year as mentioned by Philips at the Press Conference on
the semi-annual figures on July 17, 2001.
For further information on international aspects: Cor Vreven, Philips
Consumer Electronics, Tel.: +31 40 27 34224
For further information on Austrian aspects: Beate McGinn, Philips
Austria, Tel.: +43 1 60101 1431
Royal Philips Electronics of the Netherlands is one of the world's
biggest electronics companies and Europe's largest, with sales of EUR
37.9 billion in 2000. It is a global leader in color television sets,
lighting, electric shavers, color picture tubes for televisions and
monitors, and one-chip TV products. Its 212,390 employees in more than
60 countries are active in the areas of lighting, consumer
electronics, domestic appliances, components, semiconductors, and
medical systems. Philips is quoted on the NYSE (symbol: PHG), London,
Frankfurt, Amsterdam and other stock exchanges. News from Philips is
located at http://www.news.philips.com
'Safe Harbor' Statement under the Private Securities Litigation Reform
Act of 1995
This document contains certain forward-looking statements with respect
to the financial condition, results of operations and business of
Philips and certain of the plans and objectives of Philips with
respect to these items.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on circumstances
that will occur in the future. There are a number of factors that
could cause actual results and developments to differ materially from
those expressed or implied by these forward-looking statements. These
factors include, but are not limited to, levels of consumer and
business spending in major economies, changes in consumer tastes and
preferences, the levels of marketing and promotional expenditures by
Philips and its competitors, raw materials and employee costs, changes
in future exchange and interest rates (in particular, changes in tax
rates and future business combinations, acquisitions or dispositions
and the rate of technical changes. Market share estimates contained in
this report are based on outside sources such as specialized research
institutes, industry and dealer panels, etc. in combination with
management estimates.
