14 DAY TRIAL // Philips may be one of the oldest TV makers in history, but it looks like history alone is not enough to keep it in the race now that its HDTV division is losing more than it is making.
It is a common thing on the IT industry for a company to shut down or sell business ventures when they happen to no longer fit with the company direction or simply aren't profitable enough.
In some ways, this is similar to how the lack of a suitable strategy for approaching a new market segment can lead to CEOs getting sacked (and sometimes it is Apple's fault).
Sometimes, companies have to give up on venues they have stuck to for years or decades.
This is precisely what is about to happen to Philips, whose TV outlet will be transferred to TPV, a Chinese maker of monitors, partially at least.
For those that don't precisely know, Philips has been one of the world's major suppliers of TVs for more than 80 years now.
Unfortunately, it seems that its HDTV division isn't living up to expectations, actually scoring losses.
For those that want solid numbers, profits, during the first quarter of 2011, dropped by 31 percent, to £122million, due to market challenges.
In a financial deal whose details have not been disclosed, 70% of ownership will be granted to TPV, while the remaining 30% will continue to belong to Philips.
What's more, once six years have passed, this minority stake will be possible to sell as well.
“Finding a solution for our television business was our top priority and we strongly believe that the intended 30 per cent-70 per cent joint venture with TPV that was announced today will enable a return to profitability for the television business, and an increased portfolio focus for Philips in health and well- being,” said Philips chief executive Frans van Houten.