Philips 2007 Annual Report Download - page 71

Philips Annual Report 2007 77
Home Networks – including a complete range •
of digital set-top boxes such as HDTV receivers,
along with Streamium wireless audio-video links.
The license activities offer third parties access to new
and inventive Philips technologies by making licenses
available under Philips intellectual property relevant to
these technologies. Licenses can be obtained for various
products, like DVD/Blu-ray players, recorders and discs.
CE products are channeled towards the consumer
primarily through national and international retailers.
The division offers a broad range of products from high
to low price/value quartiles, necessitating a diverse
distribution model that includes mass merchants, retail
chains, independents and small specialty stores often
represented by buying groups. In order to work
in the most effective way with these retail channels,
Philips has created an organization designed around
its retail customers, with Global Key Account Managers
and Country Ambassadors.
The consumer electronics retail landscape continues
to evolve, with the major emerging markets like Russia,
China and India maintaining their strong growth,
and retailers driving their expansion, both into new
geographies, as well as into the online sector. Price
pressure remains a key challenge for the industry.
The CE business experiences seasonality, with higher sales
in the fourth quarter resulting from the holiday sales.
CE employs approximately 14,000 people worldwide, with
a global sales and service organization embracing more
than 50 mature and emerging markets in Europe, North
America, Latin America, Asia Pacic, the Middle East and
Africa. In addition, we operate manufacturing and business
creation organizations in the Netherlands, France, Belgium,
Hungary, Mexico, Argentina and Brazil, as well as overseeing
licensed manufacturing activities in China.
Placing consumers’ needs at the very heart of its strategy
and activities, Philips Consumer Electronics (CE) is
dedicated to providing consumers with great lifestyle
entertainment experiences and services whenever
and wherever they want.
Applying relevant innovation powered by simplicity-led
design to address the twin consumer desires of wellness
and pleasure, Philips has a distinctive position in the
consumer electronics space – offering applications
with ‘ambient’ benets that support both the individual’s
desire for entertainment content as well as differentiated
sensorial experiences.
Income is derived principally from two sources:
products (including product/service combinations)
and licensing activities.
In 2007, CE consisted of the following areas of business:
Connected Displays – including FlatTVs such as the •
new Aurea and the Ambilight range, the Perfect Pixel
HD Engine picture quality platform, LCD PC monitors,
and professional and business display solutions, such
as Hotel TV and public signage displays
Entertainment Solutions, consisting of Video & •
Multimedia Applications – including the Cineos
SoundBar DVD Home Theater with Ambisound
technology, Hard Disk/DVD Recorders and Blu-ray
Disc players – and Audio & Multimedia Applications –
including GoGear portable audio and video players,
Streamium Wireless Music Systems, entertainment
docks for portable audio/video players such as Philips’
GoGear range and Apple’s iPod
Peripherals & Accessories – including Prestigo •
remote controls, Philips-Swarovski Active Crystal
fashion accessories, the PhotoFrame range, amBX PC
gaming peripherals, DECT and VoIP cordless phones,
webcams and USB PC add-on drives
98 Risk management 112 Our leadership 116 Report of the Supervisory Board 126 Financial Statements
“ With value creation – and margin management – our main
objective, our 2007 activities centered on leveraging the
strength of our asset-light operating model, as well as driving
differentiation in the marketplace.”