Philips To Re-allocate Businesses From Consumer Electronics' Specialty Products Group.

Royal Philips Electronics of the Netherlands, today announced the re-allocation of a number of businesses in the Specialty Products group of Consumer Electronics into other Philips entities. The re-allocation will better align the business' strategies with other parts of the Philips Group, and is intended to create synergies leading to improved efficiencies, and better market coverage.

As of February 1, four businesses from the Specialty Products group have been transferred to Philips Components: Philips Speaker Systems, Remote Control Systems, Creative Display Solutions, and PC Cameras (an activity of the business group Philips Communication, Security & Imaging - CSI).

As of the same date, the Accessories, and Institutional TV businesses have been transferred from Specialty Products to Mainstream CE.

The international competence center for the assembly of printed circuit boards in Louviers, France is being transferred from Specialty Products to the PCB-Assembly group, which already is dedicated to assembly activities for Consumer Electronics.

Philips Speech Processing and Dictation Systems have been transferred to Philips Redesign for further optimization.

Specialty Products was set up in early 2000 as a holding company encompassing a number of Consumer Electronics businesses, operating in a stand-alone mode. Its main task was to evaluate the future of these businesses and their positioning inside or outside of Philips. As part of this process the Tuners group was transferred to the Philips Components division and five businesses of Philips Broadcast were divested, during 2000.

The remaining businesses of Specialty Products are Philips Broadband Networks, Marantz, the remaining part of CSI and SMATV (Satellite Master Antennas TV). The future of these groups will be further evaluated.

Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 30.3 billion in 2004. With activities in the three interlocking domains of healthcare, lifestyle and technology and 161,100 employees in more than 60 countries, it has market leadership positions in medical diagnostic imaging and patient monitoring, color television sets, electric shavers, lighting and silicon system solutions.