Philips Exits TV Market To Focus on Smart Lighting and Health

Dutch tech firm, Philips electronics has been scaling back and refocusing some of its home solutions, over recent years. The latest is its TV operations, which they own in partnership with TPV Technologies.  Philips announced this week that they have sold their 30 per cent share in TP Vision to majority owner TPV Technologies, to focus on their smart lighting and connected health market.

Philips said the deal would allow them to focus on more profitable venture including energy saving light bulbs or smart lighting. Philips Hue LED smart lighting has been a major success within the smart lighting market. The smart lighting market is expected to see a CAGR of 36.0% from 2013 to 2018 and estimate revenue growth from $1070 million in 2012 to $6,747.9 million by 2018, said marketsandmarkets.  They also mentioned Philips as one of the major players in the industry.

The connected health sector is another area that Philips wants to play a bigger part. According to PricewaterhouseCoopers, the worldwide mHealth market will grow to a revenue opportunity worth $23 billion by 2017. They already offer a number of connected health solutions.

Three years ago, the company discontinued its Pronto remote control, according to Philips, it did not fit within the company’s strategy any longer.

TP Vision will continue to sell Philips brand TVs under a license agreement, with annual royalty of 2.2 per cent of sales to Philips.  TPV Technologies will also make a one-off payment of €50M to Philips.

“By giving TPV full control, they [TPV] can drive synergies and act in a faster and more flexible way to changes in the market,” said Frans van Houton, Philips’ chief executive.  “With this agreement, we are creating the right set-up for the business to be successful in the extremely dynamic and competitive TV market.”

The transfer is schedule to close in the second half of this year subject to regulatory and shareholder approval.