Philips 2004 Annual Report Download - page 30

The Lighting division strengthened its leading position in the global
Lighting market in 2004. Philips believes that growth will be
stimulated by innovation, emerging technologies such as solid-state
lighting (light-emitting diodes, LEDs), marketing excellence,
delivery reliability and people.
The Semiconductors division is a leading provider of silicon
solutions, focusing on ‘Connected Consumer’ applications and
serving the consumer, communications, automotive and
computing markets. From the beginning of 2003, the division also
includes the business Mobile Display Systems that had been part of
the now-dissolved Components division.
The Other Activities sector comprises the Technology Cluster,
Corporate Investments, Global Service Units and activities that are
being redesigned or disentangled and prepared for divestment.
NAVTEQ has been deconsolidated as a result of the Initial Public
Offering in August 2004, whereby Philips’ shareholding in
NAVTEQ decreased to 34.8%. In 2003, the Speech Processing
Telephony and Voice Control business included in the Other
Activities sector was sold. The Optical Storage business was
transferred to the Other Activities sector after the dissolution of
the Components division as of 2003. In 2002, various businesses
belonging to the Other Activities sector were divested, because
they no longer fit in the strategic portfolio of the Philips Group.
The most significant were: X-ray Analytical, Philips Broadband
Networks and Communication, Security and Imaging.
As of the end of 2002, the Components division was dissolved, and
the remaining activities were moved to other divisions.
Philips encounters aggressive and able competition worldwide in
virtually all of its business activities. Competitors range from some
of the world’s largest companies offering a full range of products
to small firms specializing in certain segments of the market. In
many instances, the competitive climate is characterized by rapidly
changing technology that requires continuing research and
development commitments and substantial capital investments to
meet customer requirements. Also, the competitive landscape is
changing as a result of increased alliances between competitors.
Product sectors and principal
products
For a description of the changes in the businesses comprising the
segments and data related to aggregate sales, income from
operations and capital expenditures, see note 35 ‘Information
relating to product sectors and main countries’ of this Annual
Report. For a discussion of sales and income from operations of
the product sectors, see ‘Operating and financial review and
prospects’ on pages 50 to 58 and 63 to 65. For a discussion of
principal cooperative business activities and participating interests,
see also ‘Cooperative business activities and Unconsolidated
Companies’ on pages 40 and 41 of this Annual Report. For a
discussion of the cash flow from investing activities, including
capital expenditures, see also page 71 of this Annual Report.
Medical Systems
Philips Medical Systems is a global leader in medical imaging,
patient monitoring and associated IT systems. The product range
includes best-in-class technologies in X-Ray, ultrasound, magnetic
resonance, computed tomography, nuclear medicine, positron
emission tomography, radiation therapy planning, patient
monitoring, resuscitation products and healthcare information
management, as well as a comprehensive range of customer
support services.
Driven by a market that increasingly demands full-range suppliers
to provide total healthcare solutions, Philips Medical Systems has
completed the integration of 4 companies acquired during the
1998 – 2001 timeframe:
GATL Ultrasound, acquired in 1998, one of the global market
leaders in ultrasound and in all-digital ultrasound systems;
GADAC, acquired in 2000, a global market leader in nuclear
medicine, positron emission tomography and radiation therapy
planning;
GAgilent Technologies Healthcare Solutions Group, acquired in
2001, a global market leader in cardiac ultrasound systems as well
as cardiology and monitoring solutions;
GMarconi Medical Systems, acquired in 2001, a leader in computed
tomography. The acquisition also included Marconi Healthcare
Products (HCP), a distributor of radiology imaging supplies, which
was sold in 2002 since it did not fit in the strategic portfolio.
29Philips Annual Report 2004