Philips is dramatically scaling back its television division. Thanks to falling television prices and overall poor performance, Philips will turn over 70 percent of its television business to TPV Technology. TPV Technology is a manufacturer based out of Hong Kong. Philips will continue to own the remaining 30 percent and will collect 50 million euros ($72 million) in royalties every year starting in 2013.
Frans Van Houten, CEO of Philips, believes the company can make up some of its losses by combining “Philips’ innovation power” with TPV’s manufacturing strength. Houten said that this new joint venture will put Philips in a better position to compete with Samsung and Sony.
This deal should be finalized this summer and actual joint operations are expected to begin later in the year.
In the future, Philips will shift its attention to health and wellbeing products. There may also be some acquisitions in Philips’ future. However, Houten did not offer Bloomberg any details on that matter during a video interview. Houten only pointed to the success Philips has had in healthcare, lighting and consumer lifestyle products.
“The portfolio of Philips is much stronger now that we have dealt with television,” Houten said.