Philips India Ltd will explore a proposal to discontinue its range of black & white (B&W) televisions by the end of this year to improve profitability and focus on value added high-margin product lines. The company is, however, yet to take a final call on this.
Margins in the B&W business, which falls under the consumer electronic division, are under pressure from lower-cost manufacturers. The present tax structure is favorable for such manufacturers.
Black & white television sales declined 15 per cent in 2001 in value terms. The industry trend was also reflected in Philips balance sheet. B&W business partly eroded the good performance of other segments of the consumer electronic division.
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The sales from consumer electronics in 2001 rose to Rs 621.3 crore from Rs 581.5 crore in 2000. It also made a cash profit in the last fiscal. Consumer electronics contribute 41 per cent of total sales of Philips. Televisions, both colour (CTV) and B&W, account for 51 per cent of the revenue of the consumer electronics division.
Even though 2001 witnessed flat growth in the CTV business, Philips increased its marketshare from 3.7 per cent at the end of 2000 to 5.2 per cent at the end of 2001. The margins were under pressure as adspend remained steady amidst 10 per cent erosion in price.
Philips witnessed steady growth in the real flat (RF) segment where it claims to be market leader in 29 inches and above category. In the RF category, Philips now has a 10 per cent marketshare as against 1 per cent at the end of 2000. The company claims to have a 100 per cent marketshare in plasma TV and over 50 per cent share in projection TVs.
Meanwhile, the company has launched a special initiative to push sales in the wake of the FIFA World Cup. It has initiated a special ad campaign featuring retired footballer Pradeep Banerjee. The company has earmarked Rs 10 crore for the promo called