© Christoph_Bauer

Facing fierce competition from cheaper television brands, Philips Electronics is now preparing to either strike a major licensing deal or sell off its television division completely.

Philips Electronics has been losing money in its television division since 2007 and was relying greatly on the sales growth in other consumer appliances, health-care and lighting divisions to break even, but this has not happened. The company is still warning that it will post an operational loss before taxes of USD 140- USD 196 million in Q1 2011. This is because of shrinking margins and fierce competition in the television market, which has left Philips Electronics incapable to compete with rivals like LG and Samsung.

SNS Securities analyst, Victor Bareno, claims that the new management will shortly dispose of the largest part of its remaining TV business in the form of a brand licensing agreement. This is because the latest warning shows that Philips Electronics will not be able to turn its television business around now.

The Dutch company Philips, a trusted name in electronics since ages and a giant in manufacturing hinted that it expected heavy losses. Philips said that it expected huge loses in the figure of 100-120 million Euros from its television business because of excessive competition and pricing pressure.

© Daniel Williams

The Pricing pressure has remained quite high and Philips has taken measures to reduce inventory, their group statement said. The Philips results for the first quarter are to be out soon, but they also mentioned this earlier that profitability in their television business has remained a problem.

On the other side, Philips said that they had more than three fold rise in their overall income in 2010 due to increasing sales globally.

© warrenski

Royal Philips Electronics NV may make small acquisitions in home-based healthcare product manufacturing said the head of Philips Healthcare Stephen Rusckowski. Philips is the world's largest lighting company and it predicts that the market for medical products that can be used in residential settings will grow 7 percent to 9 percent annually. Philips is currently in competition with Siemens AG and General Electric Co. in home healthcare, and offers products worth about $7.1 billion a year in a slice of that market.
Philips has a goal to increase revenue 2% points faster than global economic growth in the next coming year. Philips has targeted Home Healthcare as one of its growth areas and this division represents about 15% of Philips' total healthcare revenue, which was 8.6 billion Euros in 2010.