Philips Exits U.S. TV Business

Manufacturing and marketing LCD TVs, especially in the U.S., is a tough gig. The margins are thin and the competitors are fierce, which is why may companies are outsourcing everything but their brand name to Asian manufacturers. Royal Philips Electronics is the most recent example of this trend.

Starting in September, every Philips set (as well as those of subsidiary Magnavox) will be made, distributed, marketed, sold, and supported by Japan's Funai. While Funai isn't a well-known TV-maker in the U.S, it has been making them for companies like Sylvania in the U.S. for years, as well as in Asia, and also sells DVD players, computer peripherals and printers. Let's just say Funai has a few decades of experience under its belt.

Philips will keep making other consumer electronics products in the U.S., such as medical devices and lights, but just couldn't stay afloat in the U.S. TV business. In the fourth quarter of 2007, Philips was the sixth most popular LCD TV brand in the U.S. With 6.6% market share, according to iSuppli. Though Philips' TV brand didn't have the cache of a Pioneer or a Samsung, it is sad to think that the years of Dutch expertise that went into the company's technology could fall by the wayside.

When Pioneer announced that Panasonic would begin producing some of its panels (not quite the same sort of deal as Philips and Funai), Pioneer insisted its R&D strengths would not go to waste. How much time and attention will Philips give Funai's designers? -Rachel Rosmarin

New York Times