The Death of Europe's Last Electronics Giant
Why Corporate Strategy Analysts Rewatch This 18-Minute Philips Decline Story CEO announces no longer high-tech company: "2010 CEO proudly announced quote we are no longer high-tech company, not sentence you'd expect hear voluntarily from company just decade earlier was every bit much giant innovator Samsung Sony, until recently third largest electronics company whole world over 350,000 employees peak, company once dominated industries lighting radio invented co-invented almost every major physical media format compact cassette CD DVD Blu-ray." Phoebus cartel planned obsolescence origins: "1925 Phillips became part now Infamous Phoebus cartel together competitors General Electric Germany's osram, various companies agreed come together artificially increase prices also lowering useful lifespans light bulbs maximum 1,000 hours, companies basically invented planned obsolescence, cartel dissolved around second world war Phillips continued grow steadily became largest producer lighting Products worldwide." Innovation failures electronics: "made big bets took huge risks kept trying innovate usually wrong direction, developed own computer line machines often weren't compatible industry standard software few people buying, leaned heavily web TVs idea people surf Internet email TVs simplified interface rather full PC flopped, even fairly Innovative cell phone lineup including prototype basically turned regular cell phone quasi touchscreen smartphone first ever 2G connections nobody bought phones." Semiconductor spinoff catastrophe: "Phillips essentially kick-started both world's two most important semiconductor companies today tsmc asml, asml only company world can make most important machines chip production today worth 266 billion dollars about 15 times much Philips, tsmc current valuation that stake alone would worth 121 billion dollars today seven times much what remains Philips combined, managed incubate three world's most important chip companies captured very little value created." Healthcare pivot survival strategy: "2000s company found success primarily imaging MRI machines CT machines, found aging population industry seeing steady growth safety reliability concern price competition wasn't nearly aggressive, heavy regulatory protections isn't much competition industry less cyclical semiconductors consumer electronics, significantly smaller business than all other stuff doing past much more comfortable one European brand long Heritage good government relations." 5 Key Timestamps: [00:00:01] The 2010 No Longer High-Tech Announcement – CEO announced no longer high-tech company decade earlier every bit giant innovator Samsung Sony, third largest electronics whole world 350,000 employees, invented co-invented every major physical media format [03:16] The Phoebus Cartel Planned Obsolescence Origins – 1925 became part Phoebus cartel together General Electric osram, companies agreed artificially increase prices lowering useful lifespans light bulbs maximum 1,000 hours, basically invented planned obsolescence [06:06] The Innovation Failures Wrong Direction Bets – Made big bets kept trying innovate usually wrong direction, developed computer line wasn't compatible industry software, leaned web TVs flopped, innovative cell phone lineup nobody bought [10:26] The Semiconductor Spinoff Value Catastrophe – Kick-started world's most important semiconductor companies tsmc asml, asml worth 266 billion 15 times Philips, tsmc stake would worth 121 billion seven times what remains Philips [14:16] The Healthcare Tech Pivot Survival Strategy – Found success imaging MRI CT machines aging population steady growth, price competition not aggressive heavy regulatory protections less competition, smaller business than past but more comfortable European brand
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