The Dutch consumer electronics giant believes that wireless connectivity is a "high-growth market," with over one billion devices forecast to be wirelessly linked by 2005 and the mobile handset becoming ubiquitous in personal and home entertainment.
Its mantra being "Let’s make things better," Philips, indeed, opted to improve its signal, so to speak, and got itself going in the game, although affected, like other manufacturers, by the global slump.
Now, Philips has found a new tack, charging itself from a product-driven to a consumer-driven company (vertical versus horizontal marketing approach), with cellular phones becoming an integral part of its wider business strategy.
As Alan Sparks, senior vice president for Philips Consumer Communications, Asia-Pacific, announced in a recent regional media launch in Singapore, "With a focused sales and marketing activity in mobile telephony, Philips is now giving stronger focus to the burgeoning Asia-Pacific market, particularly China."
And a key part of this strategy is understanding target consumers. Philips’ new range of handsets, Sparks boasted, "demonstrates our capability in meeting the exacting needs of mobile phone consumers in the Asia-Pacific and globally today."
"We had trouble in the past. (We had to change) our business model. We’re not in this for the short term," admitted Bob Pillay, general manager for South/Southeast Asia, Taiwan and the Pacific.
The corporate shakeup, according to Philips executives, included divesting handset manufacturing and research and development to the company’s Chinese partner, the Shenzhen-based China Electronics Corp., a joint venture where it now holds a minority stake. This, of course, is nothing novel since other mobile phone giants have done the same thing, instead putting their energies into satisfying consumers and focusing on sales and marketing.
Why the focus on the Asia-Pacific? Philips executives rattled off some figures. In August 2001, China overtook the United States in mobile subscriber numbers, with compounded annual growth rate of 24 percent. CAGR for the rest of Asia is 13 percent, with 123 million subscribers forecast this year. Worldwide cellular phone penetration was estimated at 14 percent in 2001 (MRT Cellular Team statistics).