Philips 2005 Annual Report Download - page 35

Philips Annual Report 2005 35
Consumer Electronics
Philips Consumer Electronics has a vision of a world
where consumers enjoy great entertainment experiences
and services whenever and wherever they want – ‘the
Connected Planet’.
Consumer Electronics (CE) is made up of four business
groups: Connected Displays, Home Entertainment
Networks,MobileInfotainmentandOpticalLicenses.*
Theserstthreebusinessgroupsdevelopandmarketthe
following products:
Connected Displays – FlatTV (LCD, Plasma),
conventional TV, LCD and CRT computer monitors;
Home Entertainment Networks – video products such
as Home Theater in a Box (HTiB), DVD and DVD+RW;
set-top boxes; audio systems and separates; accessories
such as headphones and recordable media;
Mobile Infotainment – portable audio; mobile phones
and cordless digital phones.
In addition, CE offers consumers integrated propositions
that combine its products with content and services.
CE strives to ensure technology and category leadership
as a foundation for income from two sources: products
& services and licenses. The division employs some
15,500 people worldwide. It maintains sales and service
organizations in about 50 countries and runs assembly
operations in France, Hungary, Mexico, Argentina
and Brazil.
•
•
•
Getting the fundamentals right
Over the past two years, CE’s strategic focus has been on
streamlining the business to cope with the dynamics of a
highly price-competitive, fast-evolving industry. The Business
Renewal Program launched in 2004 has successfully
simpliedtheorganization,reducedthecostandassetbase,
improved its ways of working and rationalized its portfolio.
During the course of 2005, CE continued to transform
itself into an asset-light, leaner and more agile operation.
Signicantmilestonesinclude:reachingtheBusiness
Renewal targets of EUR 400 million in cost savings ahead
of schedule; turning the North America business around
andsignicantlyincreasingplacementswithmajorretailers;
outsourcing more non-core activities; and streamlining
relationships with leading retailers, which has led to
‘supplier of the year’ awards from major players such as
Wal-Mart and Best Buy.
North America
Aftermanyyearsofdifculties,CE’sNorthAmerican
businesswasprotablein2005thankstotheimplementation
ofdifferentiatedbusinessmodelsthatenablespecic,
focused approaches to the different competitive situations
in the consumer electronics marketplace. The business
models provide a common framework around which
processes, activities, costs, system tools and organization
havebeendened.
CE’s business models cover:
Retail,frompremier/fullserviceandmainstream/ow
to end-to-end/category management;
Online, both direct and indirect;
Vertical/partner, e.g. set-top boxes.
Following the success in North America, this business
model-based approach is currently being rolled out in
Europe and other parts of the business.
•
•
•
Streamium Wireless Music Center
With the EISA award-winning Streamium Wireless Music Centre, consumers can
keep their music collection in one place and listen to it anywhere in the house.
The system is based around a wireless hub that can store an entire CD collection
(upto750CDs),linkinguptovesatellitewirelessmusicstationsaroundthehome.
* As of January 1, 2006, the organizational structure of CE was
reconguredtoenabletherespectivebusinessgroupstoaddress
the ongoing challenges more effectively. The new business groups
are Connected Displays, Home Networks, Entertainment Solutions,
Mobile Phones, Peripherals & Accessories and Optical Licenses.