Philips Electronics has decided to get out of the consumer electronics business as more than 80 years on the job. The Dutch company announced the sale of their audio, video, multimedia and accessories divisions to Japan's Funai Electric Co. on Tuesday.
The decision to sell comes after Philips reported a steep net loss for the fourth quarter. The loss was largely in part to charges surrounding a restructuring effort as well as a fine for price fixing, according to the Wall Street Journal. We're told that Funai Electric Co. picked up the assets for €150 million ($201.8 million) in cash and a brand-license fee.
Philips was once considered a pioneer in the field of consumer electronics. In the 1930s, they were the world's largest supplier of radios. They invented the audio cassette in 1963 and created the first videocassette recorder in 1972. Just over a decade later they were responsible for creating the compact disc. They were also instrumental in the rise of DVD and Blu-ray formats.
As of late, however, the company has been unable to keep pace with the changing landscape as media continues to shift to digital formats. Philips CEO Frans van Houten told the WSJ that people do not buy Blu-ray and DVD players anymore since we have online entertainment.
Moving ahead, Philips plans to focus their attention on their medical business and lighting products, like the LED lighting and control system that is responsible for illuminating the Empire State Building in New York. The company will maintain their consumer product business that's responsible for items such as coffee makers and shavers.