Philips wants to get rid of household appliances

After the televisions, the CD players and the lamps, Philips also says goodbye to the vacuum cleaners and the coffee makers.

For years the Dutch company of the same name has nothing to do with the television sets sold under the Philips brand. The lamps and the lighting installations: the same. Soon the vacuum cleaners and the coffee makers will suffer the same fate. Philips wants to get rid of it and put the entire division, including brand name, in the shop window.

“Our future lies in health technology. These activities do not fit well with this, “says CEO Frans van Houten in a statement. Of the 19.5 billion euro turnover, 2.3 billion comes from household appliances.

It is a trend that has been the order of the day in the electronics world for years. Brand names are disconnected from the producing companies. Take Nokia. The Finnish technology company has focused on network equipment and has long since stopped making mobile telephones for the consumer market. Still they are for sale. This is possible because Nokia has licensed its brand name to HMD Global, a company that manufactures devices with the Nokia brand name in China.

The same applies to Alcatel and Blackberry. The companies are no longer active in the consumer market, but the brand names continue to live on. In this case they are in the hands of the Chinese TCL Communication.

Philips sold its television equipment division in a similar way in 2012 to TP Vision from Hong Kong. A year later the audio equipment went to the Japanese company Funai (which also bought the brands Sanyo and Kodak) and in 2016 Philips Lighting became independent. The company is now called Signify, but still sells products with the Philips brand name.

“It is a strategy that is regularly applied,” says brand and marketing specialist Fons Van Dyck. “Brands change ownership because they have financial value. But such a strategy can lead to confusion. The original Philips profiles itself to the professional market as an innovative company, but for the consumer market there is another Philips, of which you do not know if the quality is equally good. A complex situation “.

Although he immediately adds that it can also turn out well. When car maker Ford sold his daughter Volvo to Geely in China, the car world caught his breath. Would the brand water down to a made-in-China product of which only the nameplate was still Swedish? The opposite happened. The Chinese re-profiled Volvo as a strong brand and emphasized European origin.

It may be that Philips sets conditions for minimum quality standards for a future acquirer of the household appliances division. It is not in the interest of the Dutch company if its name is on low-quality products.