Philips 2006 Annual Report Download - page 81

Philips Annual Report 2006 81Philips Annual Report 2006 81
Stimulating end-user focus
Philips has introduced the value proposition house
to capture end-user insights and create meaningful
innovations. Marketing, supply management and
R&D have worked closely together to create a
process for value propositions and their translation
into successful innovations.
2006 fi nancial performance
EBIT of Corporate Technologies in 2006 amounted
to a loss of EUR 205 million, compared to a loss of
EUR 219 million in 2005. In 2006, additional investments
in the newly initiated Healthcare and Lifestyle Incubators,
as well as in Molecular Healthcare activities, were partly
offset by the gain on the divestment of CryptoTec in the
fi rst quarter (EUR 31 million). The 2005 result included
a loss related to the sale of PolyLED, which was divested
in the fourth quarter of 2005.
Group-wide expenditures for research and development
activities amounted to EUR 1,668 million (6.2% of Group
sales) in 2006, compared to EUR 1,602 million (6.2% of
Group sales) in 2005.
Strategy and 2007 objectives
Corporate Technologies’ strategy for 2007 and beyond
will focus on:
Developing advanced technologies and applications
to create meaningful innovations
Generating patents to protect these innovations,
particularly in key areas of growth
Incubating new businesses in the areas of healthcare,
lifestyle and technology as a driver of sustainable growth
Improving innovation effectiveness by stimulating end-
user focus and cross-functional collaboration with
marketing and supply management.
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Corporate Investments
Activities of Corporate Investments
As of the end of 2006, Corporate Investments consists
of the following activities employing some 3,800 people:
Assembléon
Assembléon is a wholly owned subsidiary that develops,
assembles, markets and distributes a diverse range of
surface-mount technology placement equipment. Its
customers use Assembléon machines to place surface-
mount devices and other electronic components on
printed circuit boards. Assembléon employs around
750 people, mainly in the Netherlands.
High Tech Plastics - Optics
The remaining business of High Tech Plastics – Optics
develops, manufactures and markets high-end plastic,
opto- and opto-mechanic products. High Tech Plastics
Optics employs some 1,200 people.
Philips Power Solutions - Supplies
Philips Power Solutions develops and markets integrated
modules for electronic power conversion for consumer
electronics, telecommunications, information technology
and professional markets.
Ommic
Ommic develops and markets Low Noise Amplifi ers
(LNAs), smart antenna core chips and epitaxy/foundry
services for telecommunications, security, satellite and
semiconductor markets.
Philips Optical Storage
The remaining activities of Optical Storage consist of:
Optical Media & Technology (OM&T), which is engaged
in the development and verifi cation/certifi cation of
formats/standards in optical media and the
development and marketing of test discs
Automotive Playback Modules (APM), which develops
and markets playback modules for the automotive
industry, employing some 1,600 people.
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54 The Philips sectors
Other Activities
86 Risk management 100 Report of the Supervisory Board 110 Financial Statements