Philips said that it will leave the U.S. television market in an effort to improve the profitability of its TV business. Funai has licensed the names Philips and Magnavox and will begin selling TVs under these brands beginning on September 1, 2008. Philips will receive royalty payments in exchange for Funai’s right to exclusively use the Philips and Magnavox brand names.
“This agreement secures continued presence of Philips and Magnavox branded TV’s in North America in a model that safeguards Philips profitability in this highly competitive market,” Philips said in a statement. Philips expects that the “transfer of the company’s North American TV activities” will result in charges of “up to” 125 million Euro ($197 million).