Philips To Offload TV Brands In North America
Licensing Pact Allows Funai Electric To Use Philips, Magnavox Brands
By Todd Spangler -- Multichannel News, 4/8/2008 6:06:00 AM
Royal Philips Electronics and Funai Electric Co. plan to enter into a brand-licensing agreement, under which Funai will assume responsibility for the sourcing, distribution, marketing and sales of all Philips’ consumer TV activities in the United States and Canada.
Under the five-year minimum agreement, which would take effect Sept. 1, Philips will receive royalty payments in exchange for Funai’s right to exclusively use the Philips and Magnavox brand names for consumer TV products offerings in North America during this period.
Philips said it will also optimize its existing global supply base and focus its TV business on its strongest markets, which are in Europe and key emerging countries. The company will take charge of 125 million euros ($196 million) in 2008 to cover for the costs associated with transferring its North American TV activities to Funai and other restructuring steps in its television business unit.
Other Philips consumer business categories in North America are not affected by this agreement and will continue to be manufactured, marketed and sold by Philips. Philips’ television position in the rest of the world is also unaffected by this partnership with Funai.
The deal with Funai represents “a model that safeguards Philips profitability in this highly competitive market,” the company said in a statement.
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