Philips shows new wares, braces for competition

By Ashlee Vance, InfoWorld |  Networking

Royal Philips Electronics made a slew of product announcements here Friday on the eve of the Consumer Electronics Show. The Dutch company also said it would attack untapped regions and use its strong history in consumer electronics to battle growing competition from the likes of Intel and Compaq.

Guy Demuynck, executive vice president of Philips, admitted his company faced challenges throughout 2000, especially in the latter part of the year.

"The entire [consumer electronics] business remains affected by the higher cost of components caused by worldwide components shortages and the strength of the U.S. dollar against the Euro," Demuynck said. "This has led to some increase in the prices of certain products in our portfolio, especially in Europe."

To combat these troubling factors, Demuynck said Philips will focus on traditional areas of success such as display technologies, optical playback products such as DVD players, and digital storage products. Philips also will step up its charge into the Asia Pacific and Latin America regions.

"Latin America has been a shining example of how making a solid effort in a difficult economy can pay off," Demuynck said. "In the first nine months of 2000 alone, our sales in Latin America grew by 28 percent."

Philips will target consumers who are somewhat intimidated by using a PC to access Internet-based services. For those who fear the heavy cost of a desktop or the technological know-how needed to use one, Philips plans to offer some advanced Internet appliances and Web-enabled media players, he said.

The company showcased the FW-i1000 Internet Radio Mini Shelf System, a device that looks like a regular CD-equipped stereo but comes with a broadband connection for streaming audio as well. Users can access more than 1,000 Internet radio stations and connect easily to the Web with the press of a button, officials said. The device should appear by June of 2001.

Philips also hit the Internet appliance market with its line of Net Display Modules. The S10LP-NG and S10LP-TC stand as the company's hope to attract appliance manufacturers with a combination of hardware and software that Philips claims is "80 percent consumer ready" out of the factory. The appliance designs are light in weight, boast displays suitable for thin clients, and could be used to manufacture Web tablets, public information displays, and kiosks. The company expects shipments of the modules to begin in the second half of this year.

Also Friday, Philips' semiconductor division announced a deal to supply Bluetooth chip sets to headset maker Plantronics.

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