Philips 2005 Annual Report Download - page 83
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Philips Annual Report 2005 83
Research and development
expenditures
Total Philips research and development expenditures1)
in millions of euros as a % of sale
s
4,000
3,000
2,000
1,000
0
12%
9%
6%
3%
0%
2001 2002 2003 2004 2005
3,257 3,011
2,571 2,514
2,559
1) Restated to present the MDS activities as a discontinued operation
Philips research and development expenditures totaled
EUR 2.6 billion, or 8.4% of sales, compared to 8.6% in 2004.
Research and development expenditures per sector
in millions of euros 2003
1) 2004
1) 2005
2)
Medical Systems 515 477 526
DAP 129 134 139
Consumer Electronics 540 475 419
Lighting 151 175 212
Semiconductors 903 900 957
Other Activities 650 654 587
Inter-sector eliminations (317 ) (301 ) (281 )
2,571 2,514 2,559
1) Restated to present the MDS activities as a discontinued operation
2) Includes the write-off of acquired in-process research and development of
EUR 6 million
Over the past three years, total expenditure on research
and development has remained relatively stable, while sales
have shown consistent year-on-year growth. Consequently,
research and development expenditure as a percentage of
sales has fallen to a low in 2005 of 8.4%. The stabilization
of the research and development spend refl ects actions
taken to balance the overall Philips portfolio, such as the
outsourcing of the monitor and low-end fl at TV activities
to TPV, as well as the pro-active re-balancing of research
and development expenditures in line with the Company’s
healthcare, lifestyle and technology focus areas.
Research programs in Corporate Technologies
in % of total FTEs Storage Solutions
7%
Healthcare
& Wellness
32%
Digital Society
16%
Integrated
Solutions
29%
Lighting & Visual
Experiences
16%
In 2005, Medical Systems saw an increased research and
development spend in the areas of molecular medicine
and new sensor technologies, Lighting in LCD backlighting,
DAP in Consumer Health & Wellness and Semiconductors
in Home and Mobile & Personal activities. Research and
development expenditure has also been aligned to the
healthcare, lifestyle and technology focus areas, including
the establishment in late 2005 of two new research
incubators for healthcare and lifestyle (breeding grounds
for new, innovative product concepts). As a result, the
relative amount of research invested in the more traditional
areas of integrated circuits and imaging technologies has
been reduced.