Philips 2004 Annual Report Download - page 39

property rights, including patents, trademarks, designs, domain
names and copyrights, as well as the commercialization of these
rights. The aim is to extract maximum value from this portfolio
through a structured process of identification and verification of
valuable patents. In addition, IP&S plays a prominent role in
establishing standards in specific technical fields, such as optical
storage, in cooperation with Philips Research and third parties.
IP&S also exploits Philips’ technologies through the transfer of
know-how and licensing of the associated intellectual property
rights to third parties. IP&S captures the value of Philips’ portfolio
of intellectual property rights: 100,000 patent rights, 22,000
trademarks, 11,000 design rights and 2,000 domain names.
None of Philips’ business segments is dependent on a single patent
or license or a group of related patents or licenses.
System integration services make technical ideas feasible for
implementation in products, equipment and processes (through
the Center for Industrial Technology, or CFT), carry out product
and system integration projects (through Philips Digital Systems
Lab), develop embedded software on demand (TASS) and provide
Integrated Silicon design services (S3). These organizations employ
around 1,900 people.
Emerging businesses transform Research & Development projects
into new businesses and market software solutions for mobile
multimedia, and employ around 500 people.
Group-wide expenditures for research and development activities
amounted to EUR 2,534 million, representing 8.4% of Group sales
in 2004, EUR 2,617 million, representing 9.0% of Group sales in
2003 and EUR 3,043 million or 9.6% of Group sales in 2002.
Corporate Investments
Corporate Investments manages a portfolio of businesses that
strategically no longer fit in the current product divisions. Most
have been earmarked for divestment, while others are temporarily
parked for reallocation to strategic initiatives or are being
redesigned for other purposes. The most important businesses in
this group are:
Assembléon is a wholly owned subsidiary that develops,
assembles, markets and distributes a diverse range of Surface
Mount Technology (SMT) placement equipment. Its customers use
Assembléon machines to place surface-mount devices and other
electronic components on printed circuit boards.
Philips Enabling Technologies Group (ETG) operates in the
business of system integration of mechatronic (sub)systems and
modules for OEMs in the high-tech capital equipment industry.
As a system supplier, it covers the value chain from
(co-)engineering through parts production to assembly and testing.
Philips Business Communications (PBC) is a provider of enterprise
communication solutions that enable small to large-sized
organizations to exploit the power of integrated voice and data
communications.
Other businesses in Corporate Investments are Philips Advanced
Metrology Systems, Philips Aerospace, High Tech Plastics, Ommic,
CMS France, Philips Solutions and Anteryon.
Global Service Units
As a result of the ‘Transforming into One Philips’ program, Global
Service Units for Finance, HRM and IT became operational in
2004, in addition to the existing businesses for Global Real Estate
and General Purchasing.
Philips Design is dedicated to creating and adding real value by
providing distinctive, innovative and cost-effective solutions
through its proprietary High Design process. High Design is based
upon in-depth research into people’s behavior, their relationship
with technology, socio-cultural dynamics and evolving lifestyles.
The know-how gained is then fed into the innovation process,
fostering cross-company synergies and opening up new business
opportunities. Philips Design has some 450 professionals from
over 30 countries located in 12 studios around the world.
Miscellaneous
Philips Optical Storage (POS) provides optical pick-up modules,
drives and media for CD, DVD and Blu-ray to the consumer
electronics, PC, automotive and media industries.
POS will focus on the consumer DVD+RW industry at Optical
Pickup Units (OPU). Higher-functionality units (consumer RW
drives) are being integrated with Consumer Electronics’
DVD+RW set-making activities. In addition to consumer OPUs,
OPUs are made for the data segment. The OPU unit is the main
supplier to Philips BenQ Digital Storage (PBDS). In addition to
OPUs in the consumer domain, POS is also a leading supplier of
DVD ROM drives for game consoles (Microsoft Xbox).
The concentration of the PC segment activities in Taiwan and the
collaboration with BenQ will enhance Philips’ focus on DVD+RW
development. PBDS reached the number 4 market position and
has been successful in bringing innovative products to market
(e.g. 16x DL DVD+RW drives).
Philips, through its venture with PBDS, intends to remain a leading
player in the PC OEM and aftermarket optical storage industry,
with a solid basis for sustained profitability.
38 Philips Annual Report 2004
Information on the Philips Group