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The consumer electronics giant shows renewed vigour in its India plans. By Rahul Sachitanand Apart from manufacturing plants in China and the odd software centre in India, Asia used to have little say in the marketing and sales plans of European consumer electronics firms. However, when Korean giants (like Samsung) began decimating their market share, and their focus markets, Western Europe and the Americas, began to slow, all that changed. Today, Philips, the Eindhoven, Netherlands-based consumer electronics giant has over 60 per cent of its revenues from Asia Pacific and has moved India up from being just a software and support location to one of its fastest growing markets. 'Our local sales and exports amount to over Rs 3,000 crore and this is growing by 17-20 per cent per year," says K. Ramachandran, CEO, Philips Electronics India. Harnessing India's massive potential is especially important for Philips' semiconductor business, which ranks 10th globally and is seeing its business inch forward at just 5 per cent annually. "The Indian market offers several growth opportunities for us including the areas of mobile phones, set top boxes and digital TV. We already sell a mobile phone for under $25 (Rs 1,100) in China and we have a chipset to make a sub $20 (Rs 880) handset," Frans van Houten, President and CEO, Philips Semiconductors, told BT. Philips joins a raft of semiconductor and handset companies tapping the "ultra low-cost" mobile phone market. While Nokia is working with Texas Instruments, Motorola and Infineon have also announced their own initiatives in this space. Van Houten says that in addition to the low-cost handset, over 35 million cellphones will be sold this year and two million more subscribers will be added every month. Technology consultancy Gartner has estimated that India will overtake China in cellphone sales by 2009. While Philips has had a presence in India for over 75 years and employs 4,500 people, it's struggled to stay in shape against more agile competition. Van Houten, however, believes that talk of Philips' demise is premature and the company is looking to reinvent itself as a "growth company for the 21st century". While the company's branded cellphones struggle to compete with the likes of Nokia and Motorola, it has had much more success in embedding its chip into handsets such as Samsung's D500 phone, the best seller this year. The company is looking to tap new trends in the electronics market, with flat-screen TVs for example quickly eating into the market for conventional CRT (cathode ray tube) variants. While several semiconductor companies have announced plans to manufacture or showed interest in setting up an India lab or manufacturing unit, Philips remains unequivocally focussed on IP creation here. "We don't have any plans to set one up in India any time," Van Houten says. Instead, Philips will invest 50 million euros (Rs 265 crore) in a new 12-acre Innovation Campus in Bangalore, which on completion will house 3,000 people. Van Houten says engineers in India will be a key cog in the semiconductor businesses' plans, with teams working on 65-nanometre chip design, Nexperia home and mobile platforms and collaborating on global digital TV and advanced cellphone programmes. While the India centre has filed for 49 patents and made 1,200 invention disclosures, it is moving into business development and planning, according to Bob Hoekstra, CEO, Philips Innovation Campus.
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