Philips Says Good Bye to Cell Phone Business

October 14, 2006 – 4:50 pm

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Philips is an electronic giant and it had achieved some decent success in the electronic field over the years. So, nearly a decade ago, Philips bosses thought that entering into the cell phone industry was a smart idea. May be it was a good idea at that time but Philips officials could not keep up with the rest of the mobile phone industry. So, it was incurring losses in mobile phone business and now it has decided that enough was indeed enough.

Now, Philips is selling its mobile phone manufacturing business to China Electronics Corp (CEC). CNET reported:

The Dutch company’s mobile business reportedly generates an annual turnover of about 400 million euros (US$502.22 million). Its 240-plus employees are located mainly in Asia Pacific and Eastern Europe. Philips, however, has been observed to be winding down its mobile phones operations in the past few years. It will, instead, turn its focus towards its healthcare and lifestyle products, according to CEO Gerard Kleisterlee.

I could not find the amount of loss incurred by Philips in its cell phone manufacturing business but what I understand is that the loss was too much for Philips to continue.

What is the lesson we can learn from this disaster of Philips. I feel that all the companies should take mobile phone manufacturing very seriously. They should invest and get the best brains to carry out research. Things change too fast in mobile phone industry. You need to have good management to keep up with the changing times.

After Philips, who is next to exit?

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