Philips Says More Telecom, Brand Alliances to Come
Aug 29, 2003
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Dutch Philips Electronics said on Friday that it expected many more alliances with European telecom operators and with makers of strong consumer brands jointly to sell and develop products.

"There will be more partnerships in the next months and year," Gottfried Dutine, a Philips board member responsible for the company's Consumer Electronics group, said in an interview.

A recent line of portable music players co-branded with sportswear maker Nike is just a start, he said.

Philips sees these alliances as a way to raise the profit margins in the cut-throat consumer electronics business, where profits are 1 or 2 percent of sales at the best of times.

"These (Philips-Nike) products have significantly higher margins," Mr. Dutine said.

The consumer electronics maker said collaboration between different companies and even with its rivals was crucial to kick-start the stagnant consumer electronics industry by networking devices.

"We need a fundamental change to the business model if we are to take our industry into a new growth era," Gerard Kleisterlee, Philips chief executive, said in a speech.

He said recent alliances with telecommunications operators jointly to sell a broad range of fast Internet products and services were an example of this new approach. The devices are able to play music and video from the Internet and personal computers.

Philips has partnerships with fast Internet providers in Britain, Germany, Italy, Spain, Belgium, and the Netherlands. They will jointly sell Internet-enabled Philips products. (Reuters)

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