Philips 2006 Annual Report Download - page 20

Philips Annual Report 200620
The Philips Way
Philips has been improving the quality of life with pioneering
innovations for over 115 years, ever since the company was
founded as a manufacturer of lamps in 1891. We have
simplifi ed and enriched people’s lives with key advances
in the fi elds of medical imaging, television, lighting, optical
technology and integrated circuits, to name but a few.
To remain viable and competitive, however, every company
must embrace change. So, while celebrating our rich
heritage, we have in recent years been engaged in a
process of fundamental transformation – one designed
to turn Philips into a market-driven company capable
of delivering sustained profi table growth, thereby creating
value for our stakeholders.
2006 saw a major step on this journey of change with
the divestment of a majority stake in our Semiconductors
division. This move was driven by the fi rm belief that it
represented the best course of action for both Philips
and Semiconductors/NXP. Philips no longer needs to own
a semiconductor manufacturer to have access to state-
of-the-art semiconductor solutions, while the transfer
gives NXP the increased fl exibility it requires to invest,
grow and build scale in the highly competitive
semiconductor market.
The way forward
Today, Philips is a much simpler company focused on
the market, centered around the brand and driven by
innovation. The emergence of the experience economy
is creating a new market space with considerable growth
potential for Philips. It is one in which we can leverage
our competencies in design, technology and branding
to capture value from some of the major economic,
social and demographic trends, e.g. the growing demand
for healthcare, the desire for a greater sense of well-
being – in the broadest sense of the word – and the
need for energy effi ciency.
Our mission remains to improve the quality of people’s
lives through the timely introduction of meaningful
innovations. In an increasingly complex world, we strive
to bring the power of human insight and experience
to technology. We believe that technology should
enable people to live life to the full. Applying our deep
understanding of people’s needs and desires and delivering
on our promise of simplicity, we empower our customers
with solutions that are advanced, yet designed around
them and easy to experience.
Our solutions promote health and well-being and enhance
the spaces in which people live, work and play, e.g. by offering
them improved diagnostic experiences or greater control
over their surroundings. Increasingly, these solutions are
intelligent (sensing, learning and adapting), connected and
easy to interact with.
Based on insights into what consumers really need and
want, and supported by advances in miniaturization and
interaction design, our focus is gradually evolving towards
embedded functionality as an enabler of experiences.
In this way, we can help create appealing ambiences and
experiences in the home, offi ces, hotels, public spaces,
sports venues, etc., making life simpler, more enjoyable
and more productive.
6 Financial highlights 8 Message from the President 14 Our leadership 20 The Philips Group
The Philips Way