How significant is the potential for growth in the health tech industry? The international consumer products company, Amsterdam-based Royal Philips signaled that its Domestic Appliances business is on the roof* as it appears to transition to a sole-focus on health technology.
Philips led its statement announcing it “will review options for future ownership” of its Domestic Appliances business. That segment of the Philips empire manufacturers kitchen appliances, coffee makers, garment care, and home care appliances. You might recognize include recent products such as the Airfryer XXL, Perfect Care Elite steam generator, and the SpeedPro Max Aqua vacuum cleaner. Note also that Philips has already left the flat screen television and monitor market, choosing instead to license the Philips brand name to companies in Japan and China.
The term “review” doesn’t mean Philips is merely considering divesting itself of home appliances, however, evidenced by the creation of a separate legal entity for the appliance business, a process Philips expects will be finished within 12 to 18 months. According to the press release, the Domestic Appliances business is a global leader with 2.3 billion euros in 2019 sales. These last statements read a bit like a sales pitch to attract a buyer, so rather than let the appliance division fade, it appears the plan is to sell the asset.
Royal Philips’ CEO Frans van Houten stated clearly that the corporate future focus will be on personal health technology, while also Indicating the desire for a “seamless transition” for the appliances business’s customers, suppliers and partners, and employees. “At the same time,” van Houten continued, “we will continue to innovate and invest in our Personal Health businesses in areas such as oral care, mother & child care and personal care, to empower people to take control of their own health and well-being needs.”
Going forward we can expect Philips will continue to emphasize its current role and healthcare approach with a focus on connected products and integrated healthcare solutions. The takeaway here is Philips is going to sell its home appliance business in favor of the growth opportunities in healthcare technology.
* (If you don’t get the “on the roof” reference, please write to firstname.lastname@example.org for an explanation. It ties to a pretty funny joke, but we don’t have room to explain it here. I’m sure he’ll be happy to share it with you. Alfred Poor, Editor)