Philips Electronics Australian CEO Harry van Dyk said that the company was now healthcare and consumer lifestyle oriented.

Eighty years after the brand was first launched in Australia, Netherland based consumer electronics company Philips Electronics will no longer supply TV’s locally.

The decision comes after a review of the local television business by Philips CEO Gerard Kleisterlee and follows a downturn in profitability for the brand. The move leaves an uncertain future for the forty staff across Australia and around 35 in New Zealand.

The decision was announced to staff in a meeting at 10am this morning at the company’s head office in North Ryde, just shortly after the majority of Philips retail partners had been notified. Staff were flown in to attend the meeting which was chaired by Philips Electronics Australian CEO Harry van Dyk and director consumer lifestyle Matt Moran.

Moran described the reaction by retailers to the news as “shock”. However van Dyk and Moran have assured them that a service team will remain in place to work through any issues. The decision becomes effective today and Philips expects most stock to be sold through by the end of October. Although Philips would not give profit figures or confirm its biggest channel partner, it is believed to be Harvey Norman.

Only TVs to go
However, van Dyk told www.connectedaustralia.com that the decision was isolated to the TV category and would have no bearing on the company’s primary revenue centres of healthcare and lighting or the supply of Philips domestic appliances.

“Sometime ago we started to refocus on healthcare and consumer lifestyle so today we have a very different business model in the marketplace,” he said.

The move does leave some uncertainty as to the future management of Philips remaining av products such as DVD’s and MP3 players and Moran said that was now under consideration. “Without televisions, the business is a very different shape,” he said.

Operating an Australian TV business is complex and risky
In what could only be an omen to the remaining second tier TV players such as NEC and Sharp, Moran described the local TV market as complex. This is the third exit from the Australian TV market in less than nine months. In the first quarter of the year both Fujitsu General and Hitachi stopped selling TVs in Australia.

“Our leadership in the Netherlands has a vision to simplify, optimise and focus on the business and the complexities of the Australian market make it difficult to continue to operate here. Specifically, both executives described the competitiveness of Japanese and Korean suppliers as “extreme”.