Philips India Ltd is set to have an image makeover from a consumer electronics and lighting equipment manufacturer to a healthcare and lifestyle technology company.
"Consumer electronics accounts for only a third of our group's revenues in India and we do not see ourselves in direct competition with other colour television and appliances manufacturers in India. Businesses such as medical systems will be our new focus area and we would like to be known as a high technology driven healthcare and lifestyle company," K Ramachandran, vice-chairman and managing director of Philips India, told Business Standard.
The company would also be investing Rs 250 crore (Rs 2.5 billion) in the expansion of its R&D centre in Bangalore.
The center, which supports Philips' global research on medical systems, semiconductors and mobile phone operating systems, currently employs 1,500 engineers and the headcount will go upto 3,000 in the next two years.
According to Ramachandran, with the organised healthcare services taking off in the country, Philips' medical systems business would double its size every three years.
Currently, diagnostics products such as ultrasounds, cardiac systems and CT scans account for 10 per cent of the group's turnover.
The emphasis on the medical systems business is also reflected by the fact that company's board had decided to merge Philips Medical Systems and Philips Software Ltd with Philips India by March 2005 to create a single legal entity called Philips Electronics India.
According to Ramachandran, Philips' telemedicine pilot project in Tamil Nadu in association with a leading hospital group and a broadband service provider has been successful and in January 2005 the company is planning a larger rollout of the service.
Ramachandran said that Philips India, 95 per cent owned by the Dutch electronics major Royal Philips Electronics, would post a turnover of nearly Rs 2,700 crore (Rs 27 billion) in 2004 (it follows a January-December fiscal year) with a growth of 21 per cent over last year.
"This has been one of our best years as profits have also grown by nearly 150 per cent, thanks to an increased employee productivity and better supply chain management," he added.
By 2007, Philips is eyeing a turnover of Rs 5,000 crore (Rs 50 billion).
The company's consumer electronics sales increased 50 per cent largely on the back of the success of its low-priced Vardaan range of CTVs, and DVD players. In CTV market, Philips, which was once among the top three, is now the fifth largest player behind LG, Samsung, Onida and Videocon.
"In music systems and DVD players, we have a nearly 50 per cent market share, and in high value CTV categories such as flat panel, widescreen and projection TVs, we are among the top three. So not being one of the largest CTV players is not a big worry for us," he said.
