Philips to stop manufacturing TVs in US market
Philips Ending Production of TVs for U.S. Market
Philips was established in 1891 by Gerard and Anton Philips, with light bulbs as their first products. The company gained ground and was honored in 1988 for its peculiarity in innovative technology. Philips later became a trade name known by many with positive remarks.
Due to its diversification in science and technology, it dropped the "Electronics" in its name in 2013 and in 2007, Philips sold $1.7 billion in television sales in North America alone. Today, the company has branches across over 100 countries with more than 70,000 employees.
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But Why Are They Stopping?
Sequel to prevailing fall in prices and alarming competition in flat-panel television market, Philips Electronics decided to opt out from the manufacturing of televisions for sale in the United States and neighboring country, Canada. Philips TVs manufactured and marketed its products since its establishment until 2008 when the board signed a memorandum of understanding with TP Vision and Funai.
This memorandum hints that Philips license for TVs to be sold out TP Vision. However, TV sales can still be done in some nations across Europe, Asia, China, Africa and South America. The brand’s licensed was purchased by a Japanese company called FUNAI. Philips brand will still be sold, but the sets will now be made under license given to Funai Corporation in a deal expected to last for at least five years.
Funai is not a well-known consumer brand in the United States, because it is based in Tokyo, and had already sold Emerson, Sylvania, Symphonic and other local brands in the North American over the years.
Hence, Funai will now be saddled with the responsibility of sourcing of materials, distribution, marketing, sales of quality products and efficient customer service relations for Philips and Philips products. Though Philips will continue to design, manufacture, and market televisions in the rest of the world and also oversee Funai’s United States business.
This decision makes the renowned Philips TV to still be on the wanted and needed lists of electronics in United States of America. However, some customers especially in USA are still ignorant of the change because Philip site still host advertisement and sales of TVs under licensing conditions which makes visitors have wrong impression that it’s still the popular global operating.
The initial agreement was just a five years deal but was given an extension term that was signed by the two parties and till date they’re still in the chain of business partnership. Ryo Fukuda, president of Funai Corporation said, “It’s been a very successful partnership for nearly a decade, and we’re excited that we will continue to have the opportunity to represent these great brands.”
The inability to cope and withstand adversities in the prices fall of TVs, LCDs and so on is a reason Philips decided to sell out ownership rights and settle for royalties. However, this makes them more evident in the North American market with a risk of profit potential. Hence, stopping manufacturing of TVs in the US markets is a perfect bail out.