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Philips dissolves Components business

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ComputerWire: IT Industry Intelligence

Royal Philips Electronics is to dissolve its Components Division and sell off or merge some of its sub units, after a wide-ranging review of the business' performance.

The Dutch electronics giant said its aim was to reduce costs and simplify the structure and organization of its electronics activities and bring its optical storage business back to profitability.

The plan, due to be complete by the beginning of next year, will results in costs of around €175m ($173.2m), which will be taken in the fourth quarter.

Philips' components division covers connectivity, including Bluetooth, Wi-FI and tuners, display technology and storage technology.

Philips' telecom speaker business will be combined with mobile display systems and shifted into Philips Semiconductors. Certain digital display and wireless activities will be moved into Philips Consumer Electronics. Some up and coming technologies such as Liquid Crystal on Silicon, will become part of a stand alone new business initiative group. Meanwhile the Optical Storage business will be restructured with the aim of restoring profitability, and the final shape should become clear in the next eight weeks.

The restructure will focus on developing digital technologies, and "de-emphasize more mature analog businesses." Philips said a small number of businesses, with turnover of EUR 400m will be transferred to its corporate investments group "for potential sales or merger."

As a result of the overhaul, Philips said, "a divisional structure for Components is not required and the organization will be discontinued." This will mean the closure of the group's HQ in Sunnyvale, California. Philips Components CEO Matt Madeiros was not able to relocate, said Philips, and will leave the company.

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