Rupert Goodwins' Diary

Thursday 7/2/2002

Philips is an odd company. It's by far Europe's biggest electronics groups, easily the equal of many of the Japanese companies, but never quite managing to get an appropriate image among UK consumers. Unsurprisingly, it announced a record loss of 2.6bn euros for 2001 this week -- and you could be forgiven for thinking that the company's troubles are as deep as any.

But, as The Economist points out in an article today, things may not be as bleak as the figures show. For a long time, Philips has been a technology-led company: it worked out what it was good at, and then tried to find things to with those skills. It also had a corporate culture of keeping stuff in-house as much as possible, only rarely getting together with outside companies to make things happen. Nine months ago, though, Gerard Kleisterlee took over as chief executive and set about changing all that. The company now makes many more strategic alliances with old enemies of the state -- solid-state lighting with Agilent, coffee machines with Douwe Egberts, and DVD recorders with Sony, Ricoh and Yamaha. Kleisterlee has also farmed out VCR production to Japanese maker Funai, an action unthinkable among the old 'gotta do it all' Philips management.

What The Economist fails to note, however, is that Philips has been here before: most notably with the CD standard that it co-developed with Sony. That one act revolutionised home audio and created a huge industry: Philips only got a small slice of that, but that was a case of marketing going awry rather than the fundamental idea being unsound. If the new burst of enthusiasm for collaboration works as well, the benefits for everyone could be profound.

And I for one will be delighted if Philips manages to imbue us all with a sense of ownership of the brand: we're all Europeans now, and our lack of appreciation of a high-tech giant just a skip away across the North Sea is regrettable. Be nice to think of our Europe as every bit as smart in the consumer technology market as the Americans and Japanese.