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Royal Philips Electronics will acquire Charleston, S.C.-based Digital Lifestyle Outfitters (DLO), a broad-line supplier of accessories for mobile and handheld digital A/V devices. Financial details of the purchase were not disclosed.
DLO designs, markets and distributes docking stations, FM transmitters, cables and cases for mobile devices such as iPods and MP3 players. The transaction is expected to close in the second quarter of 2007, upon which DLO will become part of the peripherals and accessories business unit of Philips' consumer electronics division.
The deal fills a gap in Philips' portable accessories portfolio that had been limited to headphones and ear buds, FM transmitters and a few portable speaker docks. It also represents Philips' first grab at a stake in the lucrative iPod accessories market, which industry analysts estimate as high as $2 billion annually.
Philips has taken an aggressive approach to the accessories category in recent years, acquiring Gemini in 2004 and Power Sentry last July.
In a release, Philips estimated DLO's 2006 sales at $100 million, mainly in the United States. The company pegged the worldwide market for portable accessories at more than $4 billion in 2006, with annual growth of more than 10 percent. Philips singled out accessories for "smart" mobile phones as an emerging growth market, citing industry estimates that more than 300 million mobile phones with music functionality will be sold in 2007.
"Acquiring Digital Lifestyle Outfitters will strengthen Philips' ability to address emerging trends in this market — such as peripherals and accessories for multifunctional phones — through innovative products that deliver on Philips' brand promise of sense and simplicity," Rudy Provoost, CEO of Philips Consumer Electronics, said.
DLO is a privately held company operating out of Charleston and Raleigh/Durham, N.C. "By teaming up with Philips, DLO will be able to expand outside of the United States, capitalizing on Philips' global distribution network with key retailers," said Jeff Grady, president/CEO of DLO.