Feeds

Philips-Lucent JV goes horribly pear-shaped

Outfit that was supposed to be profitable from the off drops $403 million, Philips says it was "interesting"

  • alert
  • submit to reddit

The Essential Guide to IT Transformation

Philips is pulling the plugs on its year-old mobile phone joint venture with Lucent, with company president Cor Boostra describing it as "an interesting and costly venture". More properly, it appears to have been a disaster, but at least he's kept his sense of humour. Philips Consumer Communications, which was 60 per cent Philips-owned and 40 per cent Lucent, was intended to be a 12,000 employee, $2.5 billion mobile and cordless phone giant and, interestingly enough, at its formation last June said Michael McTighe, managing director of Philips' consumer electronics business and the CEO-elect of PCC, said: "This joint venture will be profitable from day one." One might observe that this speaks volumes about the calibre of certain companies' financial controllers. The joint venture has in fact lost $403 million so far this year, and is being split up retrospectively from September 25, with the two companies taking back their assets and employees. Lucent may well kill its operations in the area, while Philips is expected to implement substantial job cuts. Curiously, Philips stock jumped eight per cent on the news, probably on the basis that at least it was going to stop hurting. The company also reported a 37 per cent drop in Q3 profits, to $241.1 million, blaming falls in income in Consumer Products, Components and Semiconductors. Within this however seemiconductor sales grew ten per cent. Boonstra, who may not be of this planet, went on to tell reporters that Philips now intends to be one of the top five players in GSM, and that next year would be "another investment year". As the Lucent JV was a bid to form a top four mobile company, and it was, um, an investment, this may not bode well. ® Click for more stories

Boost IT visibility and business value

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.