Philips 2006 Annual Report Download - page 42

Philips Annual Report 200642
Philips underlined its growing presence in gaming with
demonstrations of its new amBX technology and PC peripherals
at IFA 2006. Philips’ amBX technology is licensed across the
gaming industry and offers a full ‘sensory surround experience’
by empowering developers to use light, color, sound, heat and
even airfl ow during gameplay – creating an ambient intelligence
environment in the process.
Investments in innovative technologies increased especially
in the areas of Healthcare & Wellness and Lighting &
Visual Experiences to 42% and 20% respectively.
In 2006, 53% of the group’s sales came from newly
introduced products. A signifi cant increase in sales
from new products compared to 2005 was visible in
CE, Lighting and DAP. Medical Systems’ sales from new
products remained well above the group level of 53%.
Philips aims to increase the share of new products in
total sales further above 50%, while at the same time
focusing on the profi tability of new products.
Research and development expenditures per sector
in millions of euros
20041) 20051) 20062)
Medical Systems 477 526 575
DAP 134 139 174
Consumer Electronics 475 419 385
Lighting 175 212 269
Other Activities 654 587 571
Inter-sector eliminations (300) (281) (306)
Philips Group 1,615 1,602 1,668
1) Restated to present the Semiconductors division as a discontinued operation
2) Includes the write-off of acquired in-process research and development of
EUR 33 million (2005: EUR 6 million)
In 2006, increased research and development investment
within Medical Systems, Lighting and DAP was offset by
a reduction in R&D expense at CE as a consequence of
increased outsourcing. Increased research and development
investments within Corporate Technologies, mainly to
set up the Healthcare and Lifestyle Incubators, were
partly offset by the divestment of several businesses.
Medical Systems’ R&D spend increased by EUR 49
million due to additional investments in new sensor
technologies and magnetic resonance imaging, as well as
the write-off of in-process R&D following the acquisition
of Witt Biomedical and Intermagnetics. Lighting increased
its investment in solid-state lighting solutions, while
DAP increased the development spend across all
businesses
, especially in Health & Wellness. Research and
development expenditure also increased in the research
incubators for healthcare, lifestyle and technology, the
breeding grounds for new, innovative product concepts.
6 Financial highlights 8 Message from the President 14 Our leadership 20 The Philips Group
Management discussion
and analysis