Top 100 Brand in The World – Rank no.40 – Philips – Netherlands
|Traded as||Euronext: PHIA,NYSE: PHG|
|Founded||May 15, 1891 (Eindhoven)|
|Key people||Jeroen van der Veer(Chairman)
Frans van Houten (CEO)
|Revenue||€24.78 billion (2012)|
|Operating income||€1.030 billion (2012)|
|Profit||€226 million (2012)|
|Total assets||€29.07 billion (2012)|
|Total equity||€11.14 billion (2012)|
|Divisions||Philips Consumer Lifestyle
Koninklijke Philips N.V. (Royal Philips, commonly known as Philips) is a Dutch multinational engineering and electronicsconglomerate headquartered in Amsterdam. It was founded in Eindhoven in 1891 by Gerard Philips and his father Frederik. It is one of the largest electronics companies in the world and employs around 122,000 people across more than 60 countries.
Philips is organized into three main divisions: Philips Consumer Lifestyle (formerly Philips Consumer Electronics and Philips Domestic Appliances and Personal Care), Philips Healthcare (formerly Philips Medical Systems) and Philips Lighting. As of 2012 Philips was the largest manufacturer of lighting in the world measured by applicable revenues. In 2013, the company sold the bulk of its remaining consumer electronics operations to Funai Electric Co.
The Philips Company was founded in 1891 by Gerard Philips and his father Frederik. Frederik, a banker based in Zaltbommel, financed the purchase and setup of a modest, empty factory building in Eindhoven, where the company started the production of carbon-filament lamps and other electro-technical products in 1892. This first factory has been adapted and is used as a Museum devoted to light sculpture
In 1895, after a difficult first few years and near bankruptcy, the Philipses brought in Anton, Gerard’s younger brother by sixteen years. Though he had earned a degree in engineering, Anton started work as a sales representative; soon, however, he began to contribute many important business ideas. With Anton’s arrival, the family business began to expand rapidly, resulting in the founding of Philips Metaalgloeilampfabriek N.V. (Philips Metal Filament Lamp Factory Inc.) in Eindhoven in 1907, followed in 1912 by the foundation of Philips Gloeilampenfabrieken N.V. (Philips Lightbulb Factories Inc.). After Gerard and Anton Philips changed their family business by founding the Philips incorporation, they laid the foundations for the later electronics multinational.
In the 1920s, the company started to manufacture other products, such as vacuum tubes. In 1939 they introduced their electric razor, thePhilishave (marketed in the USA using the Norelco brand name). The “Chapel" is a radio with built-in loudspeaker, which was designed during the early 1930s.
On 11 March 1927 Philips went on the air with shortwave radio station PCJJ (later PCJ) which was joined in 1929 by sister station PHI. PHI broadcast in Dutch to the Dutch East Indies (now Indonesia) while PCJJ broadcast in English, Spanish and German to the rest of the world.
The international program on Sundays commenced in 1928, with host Eddie Startz hosting the Happy Station show, which became the world’s longest-running shortwave program. Broadcasts from the Netherlands were interrupted by the German invasion in May 1940. The Germans commandeered the transmitters in Huizen to use for pro-Nazi broadcasts, some originating from Germany, others concerts from Dutch broadcasters under German control.
Philips Radio did not resume after liberation. Instead’ the two shortwave stations were nationalised in 1946 and renamed as Radio Netherlands Worldwide, the Dutch International Service. Some PCJ programs, such as Happy Station, continued on the new station.
Philips was instrumental in the revival of the Stirling engine when, in the early 1930s, the management decided that offering a low-power portable generator would assist in expanding sales of its radios into parts of the world where mains electricity was unavailable and the supply of batteries uncertain. Engineers at the company’s research lab carried out a systematic comparison of various power sources and determined that the almost forgotten Stirling engine would be most suitable, citing its quiet operation (both audibly and in terms of radio interference) and ability to run on a variety of heat sources (common lamp oil – “cheap and available everywhere" – was favoured). They were also aware that, unlike steam and internal combustion engines, virtually no serious development work had been carried out on the Stirling engine for many years and asserted that modern materials and know-how should enable great improvements.
Encouraged by their first experimental engine, which produced 16 W of shaft power from a bore and stroke of 30mm × 25mm, various development models were produced in a program which continued throughout World War II. By the late 1940s the ‘Type 10′ was ready to be handed over to Philips’ subsidiary Johan de Witt in Dordrecht to be productionised and incorporated into a generator set as originally planned. The result, rated at 180/200 W electrical output from a bore and stroke of 55 mm x 27 mm, was designated MP1002CA (known as the “Bungalow set"). Production of an initial batch of 250 began in 1951, but it became clear that they could not be made at a competitive price besides which the advent of transistor radios with their much lower power requirements meant that the original rationale for the set was disappearing. Approximately 150 of these sets were eventually produced.
In parallel with the generator set Philips developed experimental Stirling engines for a wide variety of applications and continued to work in the field until the late 1970s, though the only commercial success was the ‘reversed Stirling engine’ cryocooler. However, they filed a large number of patents and amassed a wealth of information, which they later licensed to other companies.
On 9 May 1940, the Philips directors learned that the German invasion of the Netherlands was to take place the following day. Having prepared for this, Anton Philips and his son in law Frans Otten, as well as other Philips family members, fled to the United States, taking a large amount of the company capital with them. Operating from the US as the North American Philips Company, they managed to run the company throughout the war. At the same time, the company was moved (on paper) to the Netherlands Antilles to keep it out of American hands.
Frits Philips, the son of Anton, was the only Philips family member to stay in the Netherlands. He saved the lives of 382 Jews by convincing the Nazis that they were indispensable for the production process at Philips. In 1943 he was held at the internment camp for political prisoners at Vught for several months because a strike at his factory reduced production. For his actions in saving the hundreds of Jews, he was recognized by Yad Vashem in 1995 as a “Righteous Among the Nations“.
After the war the company was moved back to the Netherlands, with their headquarters in Eindhoven. Many secret research facilities had been locked and successfully hidden from the invaders, which allowed the company to get up to speed again quickly after the war.
The Philips Light Tower in Eindhoven, originally a light bulb factory and later the company headquarters
Philips introduced the audio Compact Audio Cassette tape in 1963, and it was wildly successful. Compact cassettes were initially used for dictation machines for office typing stenographers and professional journalists. As their sound quality improved, cassettes would also be used to record sound and became the second mass media alongside vinyl records used to sell recorded music.
Philips introduced the first combination portable radio and cassette recorder, which was marketed as the “radiorecorder," and is now better known as the boom box. Later, the cassette was used in telephone answering machines, including a special form of cassette where the tape was wound on an endless loop. The C-cassette was used as the first mass storage device for early personal computers in the 1970s and 1980s. Philips reduced the cassette size for the professional needs with the Mini-Cassette, although it would not be as successful as the Olympus Microcassette. This became the predominant dictation medium up to the advent of fully digital dictationmachines.
In 1972 Philips launched the world’s first home video cassette recorder, in England, the N1500. Its relatively bulky video cassettes could record 30 minutes or 45 minutes. Later one-hour tapes were also offered. As competition came from Sony‘s Betamax and the VHS group of manufacturers, Philips introduced the N1700 system which allowed double-length recording. For the first time, a 2-hour movie could fit onto one video cassette. In 1977, the company unveiled a special promotional film for this system in the UK, featuring comedian Denis Norden. The concept was quickly copied by the Japanese makers, whose tapes were significantly cheaper. Philips made one last attempt at a new standard for video recorders with the Video 2000 system, with tapes that could be used on both sides and had 8 hours of total recording time. As Philips only sold its systems on the PAL standard and in Europe, and the Japanese makers sold globally, the scale advantages of the Japanese proved insurmountable and Philips withdrew the V2000 system and joined the VHS Coalition.
Philips had developed a laser disk early on for selling movies, but delayed its commercial launch for fear of cannibalizing its video recorder sales. Later Philips joined with MCA to launch the first commercial laser disk standard and players. In 1982, Philips teamed with Sony to launch the Compact Disc; this format evolved into the DVD and later Blu-ray, which Philips launched with Sony in 1997 and 2006 respectively.
In 1991, the company’s name was changed from N.V. Philips Gloeilampenfabrieken to Philips Electronics N.V. At the same time, North American Philips was formally dissolved, and a new corporate division was formed in the U.S. with the name Philips Electronics North America Corp.
In 1997 the company officers decided to move the headquarters from Eindhoven to Amsterdam along with the corporate name change to Koninklijke Philips Electronics N.V. The move was completed in 2001. Initially, the company was housed in the Rembrandt Tower, but in 2002 they moved again, this time to the Breitner Tower. Philips Lighting, Philips Research, Philips Semiconductors (spun off as NXP in September 2006) and Philips Design, are still based in Eindhoven. Philips Healthcare is headquartered in both Best, Netherlands (just outside Eindhoven) and Andover, Massachusetts, United States (near Boston).
In 2004, Philips abandoned the slogan “Let’s make things better" in favour of a new one: “Sense and simplicity".
In December 2005 Philips announced its intention to sell or demerge its semiconductor division. On 1 September 2006, it was announced in Berlin that the name of the new company formed by the division would be NXP Semiconductors. On 2 August 2006, Philips completed an agreement to sell a controlling 80.1% stake in NXP Semiconductors to a consortium of private equity investors consisting of Kohlberg Kravis Roberts & Co. (KKR), Silver Lake Partners and AlpInvest Partners. On 21 August 2006, Bain Capital and Apax Partners announced that they had signed definitive commitments to join the acquiring consortium, a process which was completed on 1 October 2006. In 2006 Philips bought out the company Lifeline Systems headquartered in Framingham, Massachusetts.
In August 2007 Philips acquired the company Ximis, Inc. headquartered in El Paso, Texas for their Medical Informatics Division. In October 2007, it purchased a Moore Microprocessor Patent (MPP) Portfolio license from The TPL Group.
On 21 December 2007 Philips and Respironics, Inc. announced a definitive agreement pursuant to which Philips acquired all of the outstanding shares of Respironics for US$66 per share, or a total purchase price of approximately €3.6 billion (US$5.1 billion) in cash.
On 21 February 2008 Philips completed the acquisition of VISICU Baltimore, Maryland through the merger of its indirect wholly owned subsidiary into VISICU. As a result of that merger, VISICU has become an indirect wholly owned subsidiary of Philips. VISICU was the creator of the eICU concept of the use of Telemedicine from a centralized facility to monitor and care for ICU patients.
In January 2011 Philips agreed to acquire the assets of Preethi, a leading India-based kitchen appliances company.
Due to the fact that net profit slumped 85 percent in Q3 2011, Philips has announced to cut 4,500 jobs to match part of an €800 million ($1.1 billion) cost-cutting scheme to boost profits and meet its financial target.
In 2011, the company posted a loss of €1.3 billion, but earned a net profit in Q1 and Q2 2012, however the management want €1.1 billion cost-cutting which will be an increase from €800 million and may cut another 2,200 jobs until end of 2014.
On 29 January 2013 it was announced that Philips had agreed to sell its audio and video operations to the Japan-based Funai Electric for €150 million, with the audio business planned to transfer to Funai in the latter half of 2013, and the video business in 2017. As part of the transaction Funai will pay a regular licensing fee to Philips for the use of the Philips brand.
In April 2013, Philips announced a collaboration with Paradox engineering for the realization and implementation of a “pilot project” on network-connected street-lighting management solutions. This project was endorsed by the San Francisco Public Utilities Commission (SFPUC).
In 2013 Philips omitted the word “Electronics" from its name, which is now Royal Philips N.V.
Past and present CEOs:
Companies acquired by Philips through the years include Amperex, Magnavox, Signetics, Mullard, VLSI, Agilent Healthcare Solutions Group, Marconi Medical Systems, ADAC Laboratories, ATL Ultrasound, portions of Westinghouse and the consumer electronics operations of Philco and Sylvania. Philips abandoned the Sylvania trademark which is now owned by Havells Sylvania except in Australia, Canada, Mexico, New Zealand, Puerto Rico and the USA where it is owned by the Osram unit of Siemens. Formed in November 1999 as an equal joint venture between Philips and Agilent Technologies, the light-emitting diode manufacturer Lumileds became a subsidiary of Phillips Lighting in August 2005 and a fully owned subsidiary in December 2006. On January 20, 2006, Philips Electronics NV said it would buy Lifeline Systems Inc in a deal valued at $750 million, its biggest move yet to expand its consumer-health business (M).
Philips is registered in the Netherlands as a naamloze vennootschap and has its world headquarters in Amsterdam. At the end of 2011 Philips had 124 manufacturing facilities across 26 countries and sales and service operations in around 100 countries.
Philips is organized into three main divisions: Philips Consumer Lifestyle (formerly Philips Consumer Electronics and Philips Domestic Appliances and Personal Care), Philips Healthcare (formerly Philips Medical Systems) and Philips Lighting. Philips achieved total revenues of €22.579 billion in 2011, of which €8.852 billion were generated by Philips Healthcare, €7.638 billion by Philips Lighting, €5.823 billion by Philips Consumer Lifestyle and €266 million from group activities. At the end of 2011 Philips had a total of 121,888 employees, of whom around 44% were employed in Philips Lighting, 31% in Philips Healthcare and 15% in Philips Consumer Lifestyle.
Philips invested a total of €1.61 billion in research and development in 2011, equivalent to 7.1% of sales. Philips Intellectual Property and Standards is the group-wide division responsible for licensing, trademark protection and patenting. Philips currently holds around 54,000 patent rights, 39,000 trademarks, 70,000 design rights and 4,400 domain name registrations.
Philips Hong Kong began operation in 1948. Philips Hong Kong houses the global headquarters of Philips’ Audio Business Unit. It also house Philip’s Asia Pacific regional office and headquarters for its Design Division, Domestic Appliances & Personal Care Products Division, Lighting Products Division and Medical System Products Division.
Philips began operations in India in 1930 with the establishment of Philips Electrical Co. (India) Pvt Ltd in Kolkata as a sales outlet for imported Philips lamps. In 1938, Philips established its first Indian lamp-manufacturing factory in Kolkata. In 1948, Philips started manufacturing radios in Kolkata. In 1959, a second radio factory was established near Pune. In 1957, the company converted into a public limited company, renamed “Philips India Ltd". In 1970 a new consumer electronics factory began operations in Pimpri near Pune; the factory was closed in 2006. In 1996, the Philips Software Centre was established in Bangalore, later renamed the Philips Innovation Campus). In 2008, Philips India entered the water purifier market.
Philips has been active in Israel since 1948 and in 1998 set-up a wholly owned subsidiary, Philips Electronics (Israel) Ltd. The company has 600 employees in Israel and generated sales of over $300 million in 2007.
Philips Medical Systems Technologies Ltd. (Haifa) is a developer and manufacturer of Computerized Tomography (CT), diagnostic andMedical Imaging systems. The company was founded in 1969 as Elscint by Elron Electronic Industries and was acquired by Marconi Medical Systems in 1998, which was itself acquired by Philips in 2001.
Philips Semiconductors formerly had major operations in Israel; these now form now part of NXP Semiconductors.
Philips France has its headquarters in Suresnes. The company employs over 3600 people nationwide.
Philips Lighting has manufacturing facilities in Chalon-sur-Saône (fluorescent lamps), Chartres (automotive lighting), Lamotte-Beuvron(architectural lighting by LEDs and professional indoor lighting), Longvic (lamps), Miribel (outdoor lighting), Nevers (professional indoor lighting).
Philips’ Greece is headquartered in Marousi, Athens. As of 2012 Philips has no manufacturing plants in Greece, although there have been in the past.
Philips also has a Light Factory in Hong Kong, with 11 automatic production lines installed which is capable of producing 200 million pieces a year. The Philips Light Factory was established in 1974, now certified with ISO 9001:2000 & ISO 14001, its product portfolio ranges from Prefocus, Lensend to E10 miniature light bulbs.
Philips founded its Italian headquarter in 1918, basing it in Monza (Milan) where it still operates, for commercial activities only.
Philips’ operations in Poland include: a European financial and accounting centre in Łódź; Philips Lighting facilities in Bielsko-Biała, Pabianice, Piła, and Kętrzyn; and a Philips Domestic Appliances facility in Białystok.
In the past, Philips UK also included
Philips Canada was founded in 1934. It is well known in medical systems for diagnosis and therapy, lighting technologies, shavers, and consumer electronics.
The Canadian headquarters are located in Markham, Ontario.
For several years, Philips manufactured lighting products in two Canadian factories. The London, Ontario, plant opened in 1971. It produced A19 lamps (including the “Royale" long life bulbs), PAR38 lamps and T19 lamps (originally a Westinghouse lamp shape). Philips closed the factory in May, 2003. The Trois-Rivières, Quebec plant was a Westinghouse facility which Philips continued to run it after buying Westinghouse’s lamp division in 1983. Philips closed this factory a few years later, in the late 1980s.
Philips Mexicana SA de CV is headquartered in Mexico City. Philips Lighting has manufacturing facilities in:Monterrey, Nuevo León; Ciudad Juárez, Chihuahua; and Tijuana, Baja California. Philips Consumer Electronics has a manufacturing facility inCiudad Juárez, Chihuahua. Philips Domestic Appliances formerly operated a large factory in the Industrial Vallejo sector of Mexico City but this was closed in 2004.
Philips’ North American headquarters is based in Andover, Massachusetts. Philips Lighting has its corporate office in Somerset, New Jersey, with manufacturing plants in Danville, Kentucky, Bath, New York, Salina, Kansas and Paris, Texas and distribution centers inMountain Top, Pennsylvania, Ontario, California and Memphis, Tennessee. Philips Healthcare is headquartered in Andover, Massachusetts. The North American sales organization is based in Bothell, Washington. There are also manufacturing facilities in Andover, Massachusetts,Bothell, Washington, Baltimore, Maryland, Cleveland, Ohio, Foster City, California, Melbourne, Florida, Milpitas, California and Reedsville, Pennsylvania. Philips Healthcare also formerly had a factory in Knoxville, Tennessee. Philips Consumer Lifestyle has its corporate office inStamford, Connecticut. It has a manufacturing plant in Snoqualmie, Washington which makes Sonicare electric toothbrushes. Philips Lighting has a Color Kinetics office in Burlington, Massachusetts. Philips Research has a laboratory in Briarcliff Manor, New York.
In 2007, Philips entered into a definitive merger agreement with North American luminaires company Genlyte Group Incorporated, which provides the company with a leading position in the North American luminaires (also known as ˜lighting fixtures“), controls and related products for a wide variety of applications, including solid state lighting. The company also acquired Respironics, which was a significant gain for its healthcare sector. On 21 February 2008 Philips completed the acquisition of VISICU Baltimore, Maryland. VISICU was the creator of the eICU concept of the use of Telemedicine from a centralized facility to monitor and care for ICU patients.
Philips Australia was founded in 1927 and is headquartered in North Ryde, New South Wales and also runs the New Zealand operation from there. The company currently employs around 800 people. Regional sales and support offices are located in Melbourne, Brisbane, Adelaide and Perth.
Current activities include: Philips Healthcare (also responsible for New Zealand operations); Philips Lighting (also responsible for New Zealand operations); Philips Consumer Lifestyle (also responsible for New Zealand operations); Philips Dictation Systems; Philips Home Healthcare (formerly Respironics, with its national network of Sleep Easy Centres); and Philips Dynalite (Lighting Control systems, acquired in 2009, global design and manufacturing centre).
Philips do Brasil (:pt:Philips do Brasil|pt) was founded in 1924 Rio de Janeiro. In 1929, Philips started to sell radio receivers. In the 1930s, Philips was making its light bulbs and radio receivers in Brazil. From 1939 to 1945, World War II forced Brazilian branch of Philips to sell bicycles,refrigerators and insecticides. After the war, Philips had a great industrial expansion in Brazil, and was among the first groups to establish in Manaus Free Zone. In the 1970s, Philips Records was a major player in Brazil recording industry. Nowadays, Philips do Brasil is one of the largest foreign-owned companies in Brazil.
Polymer Vision, the maker of The Readius, is a spin out from Philips Electronics. In May 2011, Polymer Vision designed and manufactured a 6-inch screen that displays black and white e-ink text and images at 800×600 pixels and can roll around a tube the circumference of a dime.
Philips also forayed into the pharmaceuticals market in a company best known as Philips-Duphar (Dutch Pharmaceuticals). Philips-Duphar made products for crop protection, veterinary medicine and products for human use. Duphar was sold to Solvay in 1990. In subsequent years Solvay sold of all divisions to other companies (crop protection to UniRoyal, now Chemtura, the veterinary division to Fort Dodge, a division of Wyeth), and the pharmaceutical division to Abbott Laboratories).
Philips’ record division, PolyGram, was sold to Seagram in 1998 and was merged into Universal Music Group. Philips Records continues to operate as part of UMG, its name licenced from its former parent.
Origin, now part of Atos Origin, is a former division of Philips.
ASM Lithography is a spin-off from a division of Philips.
Philips used to sell major household appliances (whitegoods) under the name Philips. After selling the Major Domestic Appliances division to Whirlpool Corporation it changed viaPhilips Whirlpool and Whirlpool Philips to Whirlpool only. Whirlpool bought a 53% stake in Philips’ major appliance operations to form Whirlpool International. Whirlpool bought Philips’ remaining interest in Whirlpool International in 1991.
Philips Cryogenics was split off in 1990 to form the Stirling Cryogenics BV, Netherlands. This company is still active in the development and manufacturing of Stirling cryocoolersand cryogenic cooling systems.
Philips’ core products are consumer electronics and electrical products (including audio equipment, Blu-ray players, computer accessories, televisions, small domestic appliances and shavers); healthcare products (including CT scanners, ECG equipment, mammography equipment, monitoring equipment, MRI scanners, radiography equipment, resuscitation equipment, ultrasound equipment and X-ray equipment); and lighting products (including indoor luminaires, outdoor luminaires, automotive lighting, lamps, lighting controls and lighting electronics).
Philips Heathcare products include:
Patient Care and Clinical Informatics
In 1913, in celebration of the 100th anniversary of the independence of the Netherlands, Philips founded Philips Sport Vereniging (Philips Sports Club, now commonly known as PSV). The club is active in numerous sports, but is now best known for its football team, PSV Eindhoven, and swimming team. Philips owns the naming rights to Philips Stadion in Eindhoven, which is the home ground of PSV Eindhoven.
Outside of the Netherlands, Philips sponsors and has sponsored numerous sport clubs, sport facilities and events. In November 2008 Philips renewed and extended its F1 partnership with AT&T Williams. Philips owns the naming rights to the Philips Arena in Atlanta, Georgia and to the Philips Championship, the premier basketball league in Australia, traditionally known as the National Basketball League. From 1988 to 1993 Philips was the principal sponsor of the Australian rugby league team The Balmain Tigers.
Outside of sports Philips sponsors the international Philips Monsters of Rock festival.
Philips is running the EcoVision4 initiative in which it committed to a number of environmentally positive improvements by 2012.
Also Philips marks its “green" products with the Philips Green Logo, identifying them as products that have a significantly better environmental performance than their competitors or predecessors.
In 2011, Philips won a $10 million cash prize from the US Department of Energy for winning its L-Prize competition, to produce a high-efficiency, long operating life replacement for a standard 60-W incandescent lightbulb. The winning LED lightbulb, which was made available to consumers in April 2012, produces slightly more than 900 lumens at an input power of only 10 W.
In Greenpeace‘s 2012 Guide to Greener Electronics that ranks electronics manufacturers on sustainability, climate and energy and how green their products are, Philips ranks 10th place with a score of 3.8/10. The company was the top scorer in the Energy section due to its energy advocacy work calling upon the EU to adopt a 30% reduction forgreenhouse gas emissions by 2020. It is also praised for its new products which are free from PVC plastic and BFRs. However, the guide criticizes Phillips’ sourcing of fibres for paper, arguing it must develop a paper procurement policy which excludes suppliers involved in deforestation and illegal logging.
Philips have made some considerable progress since 2007 (when it was first ranked in this guide), in particular by supporting the Individual Producer Responsibility principle, which means that the company is accepting the responsibility for the toxic impacts of its products on e-waste dumps around the world.