Now that January’s deal has soured for Funai to...
Now that January’s deal has soured for Funai to acquire the rest of the Philips CE business for just over $200 million in cash (CED Jan 30 p4), speculation turns to what may become of the Philips-Funai licensing agreement to…
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market Philips-branded CE products in North America when it expires in two years. Philips on Friday abruptly scrapped January’s agreement, alleging that Funai breached the pact when it “refused to take the necessary steps to enable completion of the transaction and the transfer of the business.” Philips also said it will take legal action “to recover damages caused by Funai.” Philips will investigate other opportunities for the AV and accessories businesses that were to have been transferred to Funai, while continuing to run them “within Philips operating with a significantly lower cost structure, as a standalone entity called WOOX Innovations,” it said. Funai CEO Tomonori Hayashi denied the allegations in a statement Monday. “We respected the agreement with Philips and feel that there is no grounds for breach,” he said. Both companies said their spat won’t affect their existing North American licensing deal, which already has been renewed once and runs through the end of 2015. But TPV, majority owner of the TP Vision joint venture with Philips to market Philips-brand TVs in most markets of the world, has made no secret of its ambitions to take over the North American TV business once the Funai licensing deal expires (CED Nov 2/11 p1). Last year, TP Vision’s CEO, in an interview at the Berlin IFA show with Consumer Electronics Daily, wouldn’t rule out making a play for the Philips TV business in North America after 2015. “Anything is possible for the future, but at this moment, our focus is on the markets we play in,” CEO Maarten de Vries said (CED Sept 5/12 p1). The acrimony between Philips and Funai is a stark departure from the January 2012 CES, when Philips announced that it was so “pleased with the progress Funai has made” since landing the five-year North American licensing agreement in 2008 that it decided a year early to renew the pact for two years (CED Jan 10/12 p9). In his statement Monday, Hayashi made mention of Funai’s “long and prosperous relationship with Philips” and that it and looks forward to “continuing that” with the North American licensing pact. Philips made no such mention.