Philips Says Industry Sales Marred by Product Complexity
Jan 12, 2004
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Dutch Philips Electronics said its flat TV sales were booming, but that the consumer electronics industry was failing with many other innovations because they were too difficult to use.

Speaking at a dinner speech during the Consumer Electronics Show (CES) in Las Vegas, NV, U.S., CEO Gerard Kleisterlee said the industry had developed dozens of exotic proprietary technologies to serve the needs of manufacturers, instead of consumers.

"The first guiding principle should be that the consumer always comes first. If a product requires a manual, maybe it's too complex," Mr. Kleisterlee said.

Mr. Kleisterlee's comments were supported by findings from The Yankee Group. The research firm found that 30 percent of all recently introduced home networking products currently sold were returned because the consumer could not get them to work.

Also, 48 percent of potential digital camera owners were delaying their purchase because they perceived the products to be too complicated.
Mr. Kleisterlee also said that in the flat TV segment Philips was gaining share and becoming more ambitious.

"In LCD (liquid crystal display) TV, we have a 30 to 35-percent market share across Europe," he said, contrasting it with its 20-percent market share in tube TVs. Only since the middle of 2003 has Philips offered a full line of flat TVs.
In the U.S. $100-billion a year U.S. consumer electronics market, he said Philips had a 10- to 15-percent market share in flat TVs, almost double the 7 percent of its traditional cathode ray tube TV market share.

Mr. Kleisterlee went on to confirm the company's fourth-quarter targets of a profitable global semiconductor division and U.S. consumer electronics operations around break-even.

"We're confident we're on track to meet the targets that we have set for ourselves," he said. (Reuters)

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