1980s–2000s: Decline
Philips partnered with Sony again later to develop a new "interactive" disc format called CD-i, described by them as a "new way of interacting with a television set".[23] Philips created the majority of CD-i compatible players. After low sales, Philips repositioned the format as a video game console, but it was soon discontinued after being heavily criticized amongst the gaming community.[24][25]
In the 1980s, Philips's profit margin dropped below 1 percent, and in 1990 the company lost more than US$2 billion (biggest corporate loss in Dutch history). Troubles for the company continued into the 1990s as its status as a leading electronics company was swiftly lost.[26] In 1985, Philips was the largest founding investor in TSMC[27] which was established as a joint venture between Philips, the Taiwan government and other private investors.
In 1990, the newly appointed CEO, Jan Timmer, decided to sell off all businesses that dealt with computers which meant the end of Philips Data Systems as well as other computer activities. In 1991, the businesses were acquired by Digital Equipment Corporation.[28] In 1991, the company's name was changed from N.V. Philips Gloeilampenfabrieken to Philips Electronics N.V.[29] At the same time, North American Philips was formally dissolved, and a new corporate division was formed in the US with the name Philips Electronics North America Corp.[30]
In 1997, the company officers decided to move the headquarters from Eindhoven to Amsterdam along with the corporate name change to Koninklijke Philips Electronics N.V., the latter of which was finalized on 16 March 1998.[31] In 1997, Philips introduced at CES and CeBIT the first large (42-inch) commercially available flat-panel TV, using Fujitsu plasma displays.[32][33][34] In 1998, looking to spur innovation, Philips created an Emerging Businesses group for its Semiconductors unit, based in Silicon Valley. The group was designed to be an incubator where promising technologies and products could be developed.[35][36]
The move of the headquarters to Amsterdam was completed in 2001. Initially, the company was housed in the Rembrandt Tower. In 2002, it moved to the Breitner Tower. Philips Lighting, Philips Research, Philips Semiconductors (spun off as NXP in September 2006), and Philips Design, are still based in Eindhoven. Philips Healthcare is headquartered in both Best, Netherlands (near Eindhoven) and Andover, Massachusetts, (north of Boston).
In 2000, Philips bought Optiva Corporation, the maker of Sonicare electric toothbrushes. The company was renamed Philips Oral Healthcare and made a subsidiary of Philips DAP. In 2001, Philips acquired Agilent Technologies' Healthcare Solutions Group (HSG) for EUR 2 billion.[37] Philips created a computer monitors joint venture with LG called LG.Philips Displays in 2001. In 2001, after growing the unit's Emerging Businesses group to nearly $1 billion in revenue, Scott A. McGregor was named the new president and CEO of Philips Semiconductors. McGregor's appointment completed the company's shift to having dedicated CEOs for all five of the company's product divisions, which would in turn leave the Board of Management to concentrate on issues confronting the Philips Group as a whole.[35] In February 2001 Philips sold its remaining interest in battery manufacturing to its then partner Matsushita (which itself became Panasonic in 2008).[38]
In 2004, Philips abandoned the slogan "Let's make things better" in favor of a new one: "Sense and Simplicity".[40] In December 2005, Philips announced its intention to sell or demerge its semiconductor division. On 1 September 2006, it was announced in Berlin that the name of the new company formed by the division would be NXP Semiconductors. On 2 August 2006, Philips completed an agreement to sell a controlling 80.1% stake in NXP Semiconductors to a consortium of private equity investors consisting of Kohlberg Kravis Roberts & Co. (KKR), Silver Lake Partners and AlpInvest Partners. On 21 August 2006, Bain Capital and Apax Partners announced that they had signed definitive commitments to join the acquiring consortium, a process which was completed on 1 October 2006.
In 2006, Philips bought out the company Lifeline Systems headquartered in Framingham, Massachusetts, in a deal valued at $750 million, its biggest move yet to expand its consumer-health business (M).[41] In August 2007, Philips acquired the company Ximis, Inc. headquartered in El Paso, Texas, for its Medical Informatics Division.[42] In October 2007, it purchased a Moore Microprocessor Patent (MPP) Portfolio license from The TPL Group.
On 21 December 2007, Philips and Respironics, Inc. announced a definitive agreement pursuant to which Philips acquired all of the outstanding shares of Respironics for US$66 per share, or a total purchase price of approximately €3.6 billion (US$5.1 billion) in cash.[43] On 21 February 2008, Philips completed the acquisition of VISICU in Baltimore, Maryland, through the merger of its indirect wholly owned subsidiary into VISICU. As a result of that merger, VISICU has become an indirect wholly owned subsidiary of Philips. VISICU was the creator of the eICU concept of the use of Telemedicine from a centralized facility to monitor and care for ICU patients.[44]
The Philips physics laboratory was scaled down in the early 21st century, as the company ceased trying to be innovative in consumer electronics through fundamental research.[45]
In 2010, Philips introduced the Airfryer brand of convection oven at the IFA Berlin consumer electronics fair.[46][47][48] Philips announced the sale of its Assembléon subsidiary which made pick-and-place machines for the electronics industry.[49][50]
Philips made several acquisitions during 2011, announcing on 5 January 2011 that it had acquired Optimum Lighting,[51] a manufacturer of LED based luminaires. In January 2011, Philips agreed to acquire the assets of Preethi, a leading India-based kitchen appliances company.[52] On 27 June 2011, Philips acquired Sectra Mamea AB, the mammography division of Sectra AB.[53]
Because net profit slumped 85 percent in Q3 2011, Philips announced a cut of 4,500 jobs to match part of an €800 million ($1.1 billion) cost-cutting scheme to boost profits and meet its financial target.[54] In 2011, the company posted a loss of €1.3 billion, but earned a net profit in Q1 and Q2 2012, however the management wanted €1.1 billion cost-cutting which was an increase from €800 million and may cut another 2,200 jobs until end of 2014.[55] In March 2012, Philips announced its intention to sell, or demerge its television manufacturing operations to TPV Technology.[56]
