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Philips’ Provoost Shifts Focus To Connected Planet

Las Vegas – Philips Consumer Electronics traveled to CES to reveal its new Connected Planet strategy, while announcing progress in its effort to build the Philips brand into a value-added resource.

Philips will use Wi-Fi solutions as a ‘new category’ it intends to develop as a technology leader to move its global — and specifically U.S. CE businesses — into the black.

The company is showcasing a wide and varied range of CE devices designed to wirelessly connect together, either through in-home networks or more remotely through the Internet, to access content to facilitate business and personal communication.

Recently, parent Royal Philips electronics announced that Philips Consumer Electronics North American president Larry Blanford, who was brought in as a short-term turnaround specialist, left the company Jan. 1, 2004 after almost three-years in the post. Reinier Jens, a long-time executive within Philips’ global operations, has replaced him.

TWICE interviewed Jens’ boss, Rudy Provoost, Philips Consumer Electronics Global Sales CEO, for a report on the company’s progress and plans for the year ahead.

TWICE: How would you judge the progress Philips made in North America last year?

Provoost: We built on the momentum of the past couple of years. If you look at the way our brand positioning is working out, our distribution is broadening and placements are increasing, particularly if you look at the impact of DTV. 2003 in many ways was a continuation of the journey in North America for Philips.

TWICE: In the past, Philips management has expressed disappointment in the performance of its digital television business in the United States. Where does it stand today?

Provoost: What is encouraging to see is that we have good growth in TV, and in particular segments where we want to grow. We are confident that in flat TV we are getting traction, and going forward that is going to be a very important engine for us in the value creation in the North American market.

TWICE: How would you rate the level of brand awareness for the Philips’ name?

Provoost: What is also encouraging is that people connect Philips with flat TV, so there is a good connection for what the brand stands for in the TV segments. The work done on sharpening what the brand stands for has been extremely powerful.

TWICE: Philips has also emphasized its leadership in the development of LCoS rear-projection television in the face of many new competitors using DLP and LCD-based devices. What is your assessment of that business today?

Provoost: The response from the trade to LCoS was extremely positive. We had the commercial release of those products in November. I call it the projection TV market of the future. Together with flat TV, this will be one of our flagship products at CES.

TWICE: In recent years Philips has spent heavily on advertising to help build the Philips name and image. How will the company expand on that campaign?

Provoost: We are going to focus in the way we communicate on crucial domains where we want to lead and be among the top performers. This includes displays, home entertainment networks and mobile electronics. We will pick those products that are the most powerful in the eyes of the consumer — flat TV for example —and focus our investments, maybe even more than we did in the past.

Second, we want to be even more consistent in zooming in on our unique selling propositions, such as PixelPlus II in our TV lines and our new Ambient Lighting system.

The third key is synergy. It is important that we keep working in co-equity programs with retailers, and hold hands and join forces. That would also include other partners we are working with like Nike and Bose. We need to find the right balance between working above the line and below the line with key retailers and we are going to fine-tune that equation this year.

TWICE: Royal Philips Electronics CEO Gerard Kleisterlee has stressed in recent comments the need to create new market categories where Philips can exercise leadership. What categories are those and will we see any of them at CES.

Provoost: At CES we will bring to life our vision of the Connected Planet, where we aspire to be a leading brand in a world where digital content is available and can be used any time, any where by any body in a broadband-powered, wirelessly connected environment. That vision is giving direction to us and helping us pick our battles. In the world of mobile electronics we entered into the personal infotainment arena, which we see as one of those markets. At the show we will present a Key Ring Camcorder, an extension of the hard-disk jukebox range and more exciting Xpanium and Nike/Philips products.

The world of home entertainment networks will be an area that we will get into in a much more prominent way. This will include multimedia receivers and bridge devices that allow you to capture content on your PC and enjoy it in your living room. These are all new markets, and new applications and we are leading in that field.

In the world of display, everybody is getting into LCD, but not everyone can differentiate themselves as we will with our PixelPlus technology and Ambient Lighting.

Recently, we realigned our business groups in CE around connected displays, home entertainment networks and mobile electronics. We are rallying our resources and R&D investments around these new growth opportunities, and our CES presence will be built around those areas of strength.

TWICE: In Europe you have announced partnerships with various service providers in marketing products and services, will you be looking to do similar things in the United States.

Provoost: In 2004, we will use what we have learned in the European space to go through the process in all markets of mapping, sighting, and scoping out the prominent players in the value chain and having dialog with them. We expect to come to other alliances in other parts of the world, including North America.