Disappointing economic performance forces Dutch Philips to drop its own production of flat panel TVs. TV production will be shifted into a joint venture with TPV Technology, in which Philips will hold a stake of 30 %, Bloomberg News reports.
Philips to stop TV production
The company's CEO, Frans van Houten, has been struggling with the TV business since he joined Philips. For 10 years Philips has tried to improve profitability of their TV division without luck.
Philips to stop production of TVs
Bloomberg says that Philips will sell the TV division to TPV Technology, which will continue to produce TVs under the Philips brand. TPV will have a 70% stake in the new joint venture company and Philips will own the remaining 30%. In addition, Philips will receive royalties for every TV sold. Philips also sold their PC monitor business some time ago and a few years back they quit their LCD panel production joint venture partnership with LG.
We are not sure what Philips plans to do with their 2011 line-up at this point.
Philips just reported their financial results. Europe's largest electronics manufacturer disappointed the market with a net profit of 137 million Euro in the first quarter. Analysts had expected 165 million Euro.
Van Houten said, according to Bloomberg News, that Philips expects a tough 2011, partly because of the Japanese earthquake.
Update: See Bloomberg's interview with Philips CEO below.