Electronics Production | April 09, 2008
Philips enters brand license<br> agreement with Funai
Royal Philips and Funai Electric enter into a brand licensing agreement under which Funai will assume responsibility for the sourcing, distribution, marketing and sales of all Philips’ consumer television activities in North America.
The five-year minimum agreement takes effect September 1, 2008 and Philips will receive royalty payments in exchange for Funai’s right to exclusively use the Philips and Magnavox brand names for its consumer television offerings in North America during this period. This agreement secures continued presence of Philips and Magnavox branded TV’s in North America in a model that safeguards Philips profitability in this highly competitive market. “The agreement with Funai and the other measures to improve profitability we are planning, follow our commitment that we would take decisive steps in addressing the unacceptable profitability levels in our TV business in 2008,” Philips President and Chief Executive Officer Gerard Kleisterlee said. “We have an 18 year working relationship with Funai and are confident it is an excellent partner to implement this new model for Philips’ television business in North America. This agreement will ensure a presence for Philips television in North America and uninterrupted access to innovative products for consumers.” Other Philips consumer business categories in North America are not affected by this agreement and will continue to be manufactured, marketed and sold by Philips. Philips’ television position in the rest of the world is also unaffected by this partnership with Funai. Funai will have access to Philips’ Research and Design experts to ensure Philips televisions deliver continuous innovation to consumers in both technology and form. These include the recently launched Design Collection and energy-efficient range of televisions dubbed the ‘Eco TV’. Funai will be licensed on condition of compliance with Philips requirements on brand use, product quality, product design and provision of consumer care. Philips television sales in North America amounted to EUR 1 billion in 2007. Completion of this intended agreement is subject to any mandatory governmental regulatory approvals.