Philips Businesses to Keep Cooperating on New Products

Royal Philips NV, which plans to separate the lighting business on which it was founded and focus on health care, said the two businesses will continue to work together on new products.

“Those are going to be brothers and sisters, companies that share a long history, a long tradition, a lot of relationships,” Jim Andrew, Philips’ head of innovations, said in an interview.

Amsterdam-based Philips last month said it will combine its remaining health-care and consumer goods businesses to create products catering to people who monitor their health, sports activities and nutrition on their smartphones and other devices. Lighting, which laid the foundation for the Dutch comany 123 years ago, doesn’t fit into that strategy and will become a standalone company.

At a product event in Eindhoven yesterday, Philips showed how the businesses will continue to cooperate. The company’s lighting offerings will still be used in products of the new HealthTech business, ranging from baby monitors and smart air purifiers to smartphone applications that alert deaf people about an incoming call by flashing a brighter light.

Chief Executive Officer Frans van Houten is focusing on health care offerings as consumers will continue to live longer and spend more on medical products and services. The separation is the latest step in a long reorganization as the company tries to focus on more profitable businesses to keep up with competitors such as General Electric Co. and Siemens AG.

The company predicts the separation process will take 12 to 18 months and lighting will be on its own feet in 2016.

Philips said its products and applications will be based on a open platform to allow interaction with third-party software and hardware suppliers. Still, Philips wants its own companies to work together before seeking cooperation with certain rivals, such as German lighting company Osram Licht AG, Andrew said.

“I would hope that the two Philips companies would find a way to work together before inviting some other people in.”

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