Hello, Philips Speaking

Philips, the II? Its second coming promises to be more exciting
than the first, especially when the old image problem is being assiduously
tackled. Genuine metamorphosis is always internal and happens when a company
successfully tweaks public perception of it. The name ‘Philips’ conjures up
images of coffee makers, audio cassette tapes, electric razors, battery-operated
radiosets and dressing irons.

For €30.3-bn Royal Philips Electronics, the company’s India
software division, promises to deliver the image change, if the optimism of
Philips Semiconductors CEO Frans van Houten is any indication. Houten, a 19-year
veteran with the Dutch electronics giant, is upbeat on the 49 patents, 1,137
invention disclosures, and 149 patents pending for Bangalore-based Philips
Innovation Campus (PIC), as on August 2005. "PIC employs 8% of Philips’
20,000 strong R&D workforce worldwide. That is one-third of the company’s
software population. Our expansion plans ahead will capitalize further on the
value that PIC has generated. PIC will soon graduate to the level of a
full-fledged development center for Philips," says Houten.

Philips Innovation Campus CEO Dr Bob
Hoekstra (extreme right) and Philips Electronics India CEO K
Ramachandran watch as visiting Philips Semiconductors CEO Frans van
Houten displays a smartphone with ‘Philips Inside’

Started in September 1996, PIC is currently working on
cutting-edge 65nm SoC designs and libraries, IP modules and also investing
heavily in Philips’ Nexperia home and mobile platforms using the skills of the
India design team, says Houten. Nexperia delivers what he calls the
"complete digital mobile platform" and has considerably lowered
handset prices. Samsung’s D500, which utilizes the platform, currently retails
in China for $25. "By next year, we hope to retail Nexperia-enabled phones
at $20 in India. PIC will continue to be our primary Nexperia developer,"
Houten informs. Philips is currently in talks with Indian handset players to
develop cheaper Nexperia-powered cellphones for the sub-continent, which Houten
says will provide a more engaging customer experience.

Upbeat on India
Philips will grow the Indian software and R&D operations to a
2,500-strong force by end-2007. Reliable resource availability of Bangalore is
not the only reason for Houten praising the virtues of the "strong
pillar". The cost factor is also unambiguous and compelling-Philips finds
that development and testing can be carried out of the Bangalore operations at
half the cost of Europe, one-third of the US, and one-fourth the cost of Silicon
Valley. The export revenues are also tangible: Rs 2.6 bn in 2004. PIC’s CEO
Bob Hoekstra expects exports from the India software operations to touch Rs 3.7
bn by end-2005.

The People Factor
"PIC is on a growth path," exults Hoekstra. "From ODC to a
key competence center to innovation center for Philips. We are seeing greater
involvement in cutting-edge 65-nm technologies and next-generation mobile
platforms. PIC’s next logical goal will be to become a critical value chain
partner for Philips, a highly valued partner."

The innovation center’s expansion into an upcoming 500,000
square feet state-of-the-art facility-its second in Bangalore, and spread over
12.5 acres-would bring to fruition IP development out of India in Philips’
new thrust areas.

The possibility of developing interactive Internet-based
applications for rural India lies ahead-a furtherance of Philips’ credo of
easy-to-experience and advanced technology with a pervasive touch to it. This
would be just one of many designs built around the Philips customer-blueprinted
out of India, of course.

Ravi Menon

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