Philips 2014 Annual Report Download - page 57

Sector performance 6.3.2
Annual Report 2014 57
6.3.2 About Philips Lighting
Philips Lighting is a global market leader with
recognized expertise in the development, manufacture
and application of innovative, energy-ecient lighting
products, systems and services that improve people’s
lives. We have pioneered many of the key
breakthroughs in lighting over the past 124 years, laying
the basis for our current strength and leading position
in the digital transformation.
We have a rm strategy which is based upon four pillars:
• Lead the technological revolution – strengthening
our leadership position through continued
innovation in high-quality, energy-ecient and
connected LED systems.
• Win in the consumer market – meeting consumers’
needs by building on our strength in lighting to deliver
high-quality LED lamps and luminaires. We are
pioneering and shaping the market with innovative
products, such as the Hue connected home lighting
system that can be controlled by a smartphone or
tablet. In addition, we are expanding new channels
to market including online, retailers in food and
consumer electronics, and children’s retail.
•Drive innovation in professional lighting systems and
services – providing integrated oerings for this
market, which has been an early adopter of energy-
ecient LED and now connected lighting
technologies.
• Accelerate! – We have entered the next phase and
will transition into a separate legal structure to further
our position as a world-class provider of lighting
solutions. We aim to fuel growth by strengthening our
capabilities and simplifying our organizational
structure to become faster and more agile.
We aim to further invest in LED leadership while at the
same time capitalizing on our broad portfolio,
distribution and brand in conventional lighting by
exibly anticipating and managing the phase-out of
conventional products.
We address people’s lighting needs across a full range
of market segments. Indoors, we oer lighting solutions
for homes, shops, oces, schools, hotels, factories and
hospitals. Outdoors, we oer solutions for roads,
streets, public spaces, residential areas and sports
arenas, as well as solar-powered LED o-grid lighting.
In addition, we address the desire for light-inspired
experiences through architectural projects. Finally, we
oer specic applications of lighting in specialized
areas, such as horticulture and water purication.
In 2014, Philips Lighting spanned the entire lighting
value chain – from light sources, luminaires, electronics
and controls to application-specic systems and
services – through the following businesses:
• Light Sources & Electronics: LED, eco-halogen,
(compact) uorescent, high-intensity discharge and
incandescent light sources, plus electronic and
electromagnetic gear, modules and drivers
• Consumer Luminaires: functional, decorative,
lifestyle, scene-setting luminaires
• Professional Lighting Solutions: controls and
luminaires for city beautication, road lighting, sports
lighting, oce lighting, shop/hospitality lighting,
industry lighting
• Automotive Lighting: car headlights and signaling*
• Lumileds: packaged LEDs*
* On June 30, 2014, Philips announced the start of the
process to combine the Lumileds and Automotive
Lighting businesses into a stand-alone company and
explore strategic options to attract capital from third-
party investors for this combined business. The results
of the combined Lumileds/Automotive Lighting
components business are reported as discontinued
operations.
Philips Lighting
Total sales by business as a %
2014
59Light Sources & Electronics
6Consumer Luminaires
35Professional Lighting Solutions
The Light Sources & Electronics business conducts its
sales and marketing activities through the professional,
OEM and consumer channels, the latter also being used
by our Consumer Luminaires business. Professional
Lighting Solutions is organized in a trade business
(commodity products) and a project solutions business
(project luminaires, systems and services).
The conventional lamps industry is highly consolidated,
with GE and Osram as established key competitors. The
LED lighting market, on the other hand, is very dynamic.
We face new competition from Asia and new players
from the semiconductor and building management
sectors. The luminaires industry is fragmented, with our
competition varying per region and per market
segment.
Under normal economic conditions, Lighting’s sales are
generally not materially aected by seasonality.
Philips Lighting has manufacturing facilities in some 25
countries in all major regions of the world, and sales
organizations in more than 60 countries. Commercial
activities in other countries are handled via distributors