It's not only Philips that has bitten the dust, there's been a succession of other large Western electronic companies that have either gone out of business or that are now only a shadow of their former selves. Here's a partial list:
Pye Industries, UK
EMI (Electric & Musical Industries), UK
Marconi, UK
AWA (Amalgamated Wireless Australiasia), Australia
Telefunken, Germany
Thompson CSF, France
HP Hewlett Packard, USA
Kodak, USA
Polaroid, USA
Varian Associates, USA
Ampex, USA
General Radio, USA
Philco, USA
Admiral, USA
RCA (Radio Corporation of America), USA
Philips, NL - as mentioned
I used to work for RCA and back then it was the largest electronics company in the world and Philips was second. When RCA failed, Philips became the biggest but unfortunately its time at the top was short-lived.
There's several things that seem to characterize many of these failures, the first is that when founders leave or die companies often seem to lose drive and direction, and second companies become too big and diversification seems to kill their R&D/innovation.
For example, RCA lost its direction and fell apart when its founder David Sarnoff died and his son took the helm. Similarly, another spectacular failure was Hewlett Packard when its last founder died.
That said, there are exceptions such as Apple—but then it may not have been in existence long enough to tell, it hasn't been around anywhere near as long as say, Philips has. Moreover, it's highly dependent on Asian manufacturing, in the long-term, that may be Apple's Achilles's heel.
Still, I think that's only part of the problem. Manufacturing and innovation in Western countries are now in a state of malaise and they're being quickly overtaken by Asian countries such as China. Like it or not, the West generally is in a state of decline.
Here are some others - Zenith, and Motorola too - both exist in some form, but are shadows of their former selves. Also, notably - Western Electric.
Zenith was quite successful, and was making TV sets in the US until the early 90's - but eventually the lower cost of overseas manufacturing caught up with them.
Motorola and Western are the saddest though, Motorola made everything, soup to nuts used in their products, and then bit by bit sold off the bits util they were left with two way radios (Motorola Solutions is the survivor of the original Motorola Inc). Western never really figured out divestiture, there are bits of pieces of it left, if anything Avaya is the closest to a spiritual successor to it (part numbering styles and engineering style).
There have been many books written on why companies succeed/fail. The general observations that you make all concur with agreed wisdoms on this matter: small startup = mobile, creative, innovative and fast moving. Estabslhsed blue-chip company = the opposite.
So... how does a large monolith renew itself? One solution with a reasonable track record is to 'replace from within', much as a cuckoo replaces its host.
1. Set up a small unit within your (monolith) company.
2. Staff it with your best and brightest.
3. Physically separate this unit from the rest of the company, but not so much that they forget 'who they belong to'.
4. Establish a line of direct communication between this unit and a high-level manager, bypassing middle managers.
5. XXXX
6. Profit!
XXXX is the problem part. How to graft the young onto the old? Failure to capitalize = Kodak (invented the digital camera but could not make it 'happen'), Palm and its development of WebOS (could have been a contender, but let down by poor hardware and other stuff), Palo Alto and Xerox ('nuff said).
Like it or not, the West generally is in a state of decline.
"In 2000, Europe had 41 of the biggest 100 companies. Now it only has 15. A 63% decline in just two decades. The Economist says the "most striking" reason is the lack of successful startups.
63% declines are something you can't repeat too many times without creating the kind of situation historians give names to. Two more such periods, and Europe only has 2 of the top 100 companies."
The west, particularly the USA, sacrificed so many industries on the alter of globalization. We gutted our workforce and told ourselves we were keeping the best jobs for ourselves. The loss of all those jobs and economic activity has contributed significantly to the wealth gap IMO. I don’t think that having lots of cheap trinkets available on Amazon has been worth it, to be honest.
> Still, I think that's only part of the problem. Manufacturing and innovation in Western countries are now in a state of malaise and they're being quickly overtaken by Asian countries such as China. Like it or not, the West generally is in a state of decline.
It’s also worth connecting this to the economic stagnation in Western Europe since 2008. GDP per capita has not budged in the UK, France, and Italy in more than a decade.
"seem to lose drive and direction", thats what happen to the company I work (until they close our factory by the end of 2023). For several years, there had been many ideas what to do and to change. But really just ideas, nobody did really decide and said "ok, let's do it". For years I used to say we have no idea where we like to go with our company. Now I know, our factory get closed be the end of 2023.
> For example, RCA lost its direction and fell apart when its founder David Sarnoff died and his son took the helm. Similarly, another spectacular failure was Hewlett Packard when its last founder died.
> That said, there are exceptions such as Apple—but then it may not have been in existence long enough to tell
Apple would be about the same story: it hasn't created anything really meaningful since Jobs, it mostly lives on the legacy that has been set. Luckily for Cook the company has a good storytelling and aura, but major innovation hasn't been there for a long time, and when the wave slows down it may well end up like the others you listed.
> There's several things that seem to characterize many of these failures, the first is that when founders leave or die companies often seem to lose drive and direction, and second companies become too big and diversification seems to kill their R&D/innovation.
The latter is the downfall of most conglomerates. Kodak invented the digital camera and then failed to capitalize because they were afraid it would cannibalize their film division. Which was true -- it did -- but then the digital camera business went to someone else. Leadership needs to be able to make hard calls like that before it's too late.
> Like it or not, the West generally is in a state of decline.
I don't like it! I think the first indicator of the west's downfall was our declining production of bricks. My parents warned me of how poor I would one day be because our steel production was in decline. Now I prepare my children to live in the poverty of the United States where they have no hope of ever working in a radio factory.
While others have tackled the thesis as whole here, and I generally agree with the overall sentiment that the value chain just moved and manufacturing electronics is a really global and competitive business that makes it hard to differentiate, I want to poke specifically at Kodak.
Kodak patented and had provable manufacturing runs of fiber optic, flexible printed motherboards for computers
This, as I understand it, is (was?) the "next moment" for computing because fiber optics can dramatically increase the bandwidth of hardware components.
Yet, it went nowhere, and to this day, I don't understand why. Never was able to find follow up about it other than the original demos in a news broadcast
> Still, I think that's only part of the problem. Manufacturing and innovation in Western countries are now in a state of malaise and they're being quickly overtaken by Asian countries such as China. Like it or not, the West generally is in a state of decline.
Not really. China is low end manufacture and has not moved meaningfully out of that niche at all. In fact they are losing their advantage with no alternative to fall back on. Chinese assembly is not nearly as cheap as it was and their playbook is being copied by other countries (India, Vietnam).
why is HP on the list? its revenues are on par or slightly below competitors in the sector and if you add the enterprise revenues its more of a 1 to 1. Hp consumer revenue 60 billion, HP enterprise revenue 30 billion in comparison to dell 100 billion and lenovo 70 billion in annual revenue the two include enterprise revenues which isn't spun off like with HP. All three are at peak revenues. Aside from that cisco, ubiquiti, nvdia, amd, intel(ish),LAM, AMAT, micron are the best in their fields honestly its seems like EU companies are in shambles not US take a look at ericsson vs huawei idk if the US has any real competitors in telecommunication hardware cisco is more of a networking company nowadays.
"Manufacturing and innovation in Western countries are now in a state of malaise and they're being quickly overtaken by Asian countries such as China. Like it or not, the West generally is in a state of decline."
I think this has a lot to do with ever stricter environmental regulations; construction is hitting the same roadblock, environmental assessments are onerous in many places of the West. As a result, manufacturing moves to Asia and housing doesn't get built at all.
Software, which doesn't face the same hurdles, flourishes in the West. A typical consumer combo is Asian hardware with European/American software. I don't think we are out of innovative spirit just yet, we rather have to prune the regulations a bit, because well-intentioned or no, one can regulate himself to complete stagnation.
> Like it or not, the West generally is in a state of decline.
Europe is in a state of decline. The US is doing fine. The difference between the US and Europe is that we went up the value chain ( Microsoft, Apple, Google, Facebook, Netflix, Nvidia, etc ). Europe did not.
Consumer electronics is relatively low level tech. It was "gifted" to the japanese and then the koreans and eventually the chinese while we moved up the chain to the more valuable internet, social media and software development.
Where is europe's microsoft? Their apple? Their facebook? Their google? There is no "the West". No more than there is "the East".
Edit: Also, it isn't consumer electronics that's the issue. It's the future ( the next rung up the value chain ) - AI, big data, quantum computing, bio-tech, green energy tech, etc. Will europe even participate because currently it looks like it will be only the US and China competing.
> Manufacturing and innovation in Western countries are now in a state of malaise and they're being quickly overtaken by Asian countries such as China. Like it or not, the West generally is in a state of decline.
China is pretty good at manufacturing, and pretty terrible at everything else. Research and innovation in particular are very much China's weak point.
I grew up in Eindhoven, the birthplace of Philips. It was everywhere in the city back then. My entire family worked for Philips: dad, grandfather, uncles.
I don't really think it's a bad thing what happened to it. Many viable components have been spun off and sold in various ways; the business is essentially fine, just not under the Philips name and management. Does that really matter? I don't think it does. And giant companies are not a good thing: the bureaucracy in Philips was legendary and giant companies don't tend to be good for consumers.
It is hard to underestimate how much influence Philips has had on the history of Eindhoven; it turned a small medieval town to the city it is today (technically its had city rights since 12-something, but it was really just a small town until 1920). It's also easy to be romantic and look back with rose-tinted glasses, or to transpose activities from the past to today.
IMO where Philips went wrong is selling off their name for everything they weren't interested in to cheap brands, totally undermining their name. TVs (Philips CRT tubes) were legendary in the 80s, now they're made by a budget OEM from Hong Kong. Pretty much all home electronics in the end. Very bad strategy, with minor short-term rewards and killing the brand long-term.
The name game with Philips goes back many decades because there was once a vacuum tube manufacturer in the U.S.A. named ''Phillips'' (two ls), so they were forced to adopt new trade names for the lucrative North American market: the Norelco name for consumer appliances and the Maganavox name for consumer electronics. Their reputation for quality was excellent back then. Oddly, Canada's Bell Telephone subsidiary Northern Electric did not push Philips away from using the Norelco name. Nowadays those names have almost no connection to their original organization.
Yes!
I stopped buying Philips products and have actively advised people to avoid the brand after owning 2 different products with questionable quality.
At this point I wouldn't buy any of their products, so it's hard for them to convince me again, even if they improve.
Sad.
What happened to Phillips is something that proved beneficial in the long run.
Legacy of Philips is now ASML, NxP, pretty good startup scene in Eindhoven, and a few other companies.
The only victim here is the name. If Philips tried to move as one company they would have probably dragged down their chip related businesses by siphoning money into the fields they were losing.
Of course one could argue that the company under Philips name should have chose different direction and spun off consumer or medical market, but at the end of the day it's just a name.
I believe in hindsight this will be a way better outcome for everyone than the one we'll see from big tech if they're not broken up. There are already too many examples of them killing competition by leveraging their monopolies or buying it up and killing it off.
Not mentioned in the video is that Philips Ventures is effectively buying up MedTech companies with proven tech, and hovering up the IP into their portfolio as an 'innovation' strategy.
Effectively it's a zero risk venture for big corp companies that depend on innovation, they don't have to sink money in research projects in their own R&D labs. Just find someone with something interesting which has already been de-risked, with proven feasibility, buy them out and develop for manufacturing.
For clarity all big MedTech companies are doing this not just Philips.
I have a old Philishave Philips shaver who is made in the netherlands. Replaced the old shaver with a newer Philishave shaver made in China. Turns out the old shaver is better than the new. The old shaver shaves more closely to the skin for a better result more smooth shave.
Don't we consider ASML a tech giant? A spin-out of Philips btw, as is NXP for example.
Edit: Should have watched the movie first. To answer my question: I guess we don't. And, it's electronics not tech indeed, otherwise it could have included Siemens for example.
My uncle used to work for Philips in Brazil at its peak. They had just completed building a data-center (we didn't call them like that back then) in the 70's, IIRC, to host the many very large IBM mainframes they operated. It was a thing to behold - the whole company connected via 3278 terminals, running e-mail and other productivity applications on IBM PROFS (later to be called OfficeVision).
The building now hosts the biggest datacenter of one of the largest Brazilian hosting companies.
Too many companies moved from making things to licensing technology and brands, forgetting that the best way to get valuable technologies and brands is by making things.
Isn't this disingenuous? Phillips owns a 24% stake, or 99 million shares, in ASML. Philips is granting the underwriters an option for up to nine million shares. Philips also still holds about 1.3 billion TSMC shares, representing approximately 5.0 percent of TSMC’s issued stock.
ASML is a monopoly that is literally the only supplier for most cutting edge equipment used by semi-conductor fabs globally (TSML, Intel, etc). They make it all possible. In this regard, Phillips has become more of a holding company than an electronics operation itself.
Strange, my Dad worked for Philips for 30 years, well Mullards, which was a subsidiary. Reminded me of the newsletters, the employee discounts, the calendar type thing to celebrate 100 years.
Every time we have one of these threads, it fills to the top with denial. Maybe it would be healthier for the EU if people would accept the stats and consider how to improve the situation? It's certainly possible - consider Massachusetts turnaround after the 90s, same with Pittsburgh, Colombia etc.
Inertia kills economies, dynamism drive them. I see a lot of cultural acceptance of "the way it's always been done" here.
[+] [-] hilbert42|3 years ago|reply
Pye Industries, UK
EMI (Electric & Musical Industries), UK
Marconi, UK
AWA (Amalgamated Wireless Australiasia), Australia
Telefunken, Germany
Thompson CSF, France
HP Hewlett Packard, USA
Kodak, USA
Polaroid, USA
Varian Associates, USA
Ampex, USA
General Radio, USA
Philco, USA
Admiral, USA
RCA (Radio Corporation of America), USA
Philips, NL - as mentioned
I used to work for RCA and back then it was the largest electronics company in the world and Philips was second. When RCA failed, Philips became the biggest but unfortunately its time at the top was short-lived.
There's several things that seem to characterize many of these failures, the first is that when founders leave or die companies often seem to lose drive and direction, and second companies become too big and diversification seems to kill their R&D/innovation.
For example, RCA lost its direction and fell apart when its founder David Sarnoff died and his son took the helm. Similarly, another spectacular failure was Hewlett Packard when its last founder died.
That said, there are exceptions such as Apple—but then it may not have been in existence long enough to tell, it hasn't been around anywhere near as long as say, Philips has. Moreover, it's highly dependent on Asian manufacturing, in the long-term, that may be Apple's Achilles's heel.
Still, I think that's only part of the problem. Manufacturing and innovation in Western countries are now in a state of malaise and they're being quickly overtaken by Asian countries such as China. Like it or not, the West generally is in a state of decline.
[+] [-] Aloha|3 years ago|reply
Zenith was quite successful, and was making TV sets in the US until the early 90's - but eventually the lower cost of overseas manufacturing caught up with them.
Motorola and Western are the saddest though, Motorola made everything, soup to nuts used in their products, and then bit by bit sold off the bits util they were left with two way radios (Motorola Solutions is the survivor of the original Motorola Inc). Western never really figured out divestiture, there are bits of pieces of it left, if anything Avaya is the closest to a spiritual successor to it (part numbering styles and engineering style).
[+] [-] Daub|3 years ago|reply
So... how does a large monolith renew itself? One solution with a reasonable track record is to 'replace from within', much as a cuckoo replaces its host.
1. Set up a small unit within your (monolith) company.
2. Staff it with your best and brightest.
3. Physically separate this unit from the rest of the company, but not so much that they forget 'who they belong to'.
4. Establish a line of direct communication between this unit and a high-level manager, bypassing middle managers.
5. XXXX
6. Profit!
XXXX is the problem part. How to graft the young onto the old? Failure to capitalize = Kodak (invented the digital camera but could not make it 'happen'), Palm and its development of WebOS (could have been a contender, but let down by poor hardware and other stuff), Palo Alto and Xerox ('nuff said).
[+] [-] MrBuddyCasino|3 years ago|reply
63% declines are something you can't repeat too many times without creating the kind of situation historians give names to. Two more such periods, and Europe only has 2 of the top 100 companies."
https://twitter.com/paulg/status/1400777576965185539
[+] [-] Dig1t|3 years ago|reply
[+] [-] rayiner|3 years ago|reply
It’s also worth connecting this to the economic stagnation in Western Europe since 2008. GDP per capita has not budged in the UK, France, and Italy in more than a decade.
[+] [-] _trampeltier|3 years ago|reply
[+] [-] gregoriol|3 years ago|reply
Apple would be about the same story: it hasn't created anything really meaningful since Jobs, it mostly lives on the legacy that has been set. Luckily for Cook the company has a good storytelling and aura, but major innovation hasn't been there for a long time, and when the wave slows down it may well end up like the others you listed.
[+] [-] AnthonyMouse|3 years ago|reply
The latter is the downfall of most conglomerates. Kodak invented the digital camera and then failed to capitalize because they were afraid it would cannibalize their film division. Which was true -- it did -- but then the digital camera business went to someone else. Leadership needs to be able to make hard calls like that before it's too late.
Which founders tend to be better at than MBAs.
[+] [-] georgeecollins|3 years ago|reply
I don't like it! I think the first indicator of the west's downfall was our declining production of bricks. My parents warned me of how poor I would one day be because our steel production was in decline. Now I prepare my children to live in the poverty of the United States where they have no hope of ever working in a radio factory.
[+] [-] mschuster91|3 years ago|reply
[+] [-] no_wizard|3 years ago|reply
Kodak patented and had provable manufacturing runs of fiber optic, flexible printed motherboards for computers
This, as I understand it, is (was?) the "next moment" for computing because fiber optics can dramatically increase the bandwidth of hardware components.
Yet, it went nowhere, and to this day, I don't understand why. Never was able to find follow up about it other than the original demos in a news broadcast
[+] [-] zeristor|3 years ago|reply
https://en.wikipedia.org/wiki/EF50
Used for TV, and then for radar in WWII.
Added:
http://www.r-type.org/articles/art-021.htm
[+] [-] yawniek|3 years ago|reply
[+] [-] rapsey|3 years ago|reply
Not really. China is low end manufacture and has not moved meaningfully out of that niche at all. In fact they are losing their advantage with no alternative to fall back on. Chinese assembly is not nearly as cheap as it was and their playbook is being copied by other countries (India, Vietnam).
[+] [-] AnonMO|3 years ago|reply
[+] [-] sdze|3 years ago|reply
[+] [-] inglor_cz|3 years ago|reply
I think this has a lot to do with ever stricter environmental regulations; construction is hitting the same roadblock, environmental assessments are onerous in many places of the West. As a result, manufacturing moves to Asia and housing doesn't get built at all.
Software, which doesn't face the same hurdles, flourishes in the West. A typical consumer combo is Asian hardware with European/American software. I don't think we are out of innovative spirit just yet, we rather have to prune the regulations a bit, because well-intentioned or no, one can regulate himself to complete stagnation.
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] weinzierl|3 years ago|reply
[+] [-] vasco|3 years ago|reply
[+] [-] brwck|3 years ago|reply
Europe is in a state of decline. The US is doing fine. The difference between the US and Europe is that we went up the value chain ( Microsoft, Apple, Google, Facebook, Netflix, Nvidia, etc ). Europe did not.
Consumer electronics is relatively low level tech. It was "gifted" to the japanese and then the koreans and eventually the chinese while we moved up the chain to the more valuable internet, social media and software development.
Where is europe's microsoft? Their apple? Their facebook? Their google? There is no "the West". No more than there is "the East".
Edit: Also, it isn't consumer electronics that's the issue. It's the future ( the next rung up the value chain ) - AI, big data, quantum computing, bio-tech, green energy tech, etc. Will europe even participate because currently it looks like it will be only the US and China competing.
[+] [-] onetokeoverthe|3 years ago|reply
[deleted]
[+] [-] arp242|3 years ago|reply
China is pretty good at manufacturing, and pretty terrible at everything else. Research and innovation in particular are very much China's weak point.
[+] [-] arp242|3 years ago|reply
I don't really think it's a bad thing what happened to it. Many viable components have been spun off and sold in various ways; the business is essentially fine, just not under the Philips name and management. Does that really matter? I don't think it does. And giant companies are not a good thing: the bureaucracy in Philips was legendary and giant companies don't tend to be good for consumers.
It is hard to underestimate how much influence Philips has had on the history of Eindhoven; it turned a small medieval town to the city it is today (technically its had city rights since 12-something, but it was really just a small town until 1920). It's also easy to be romantic and look back with rose-tinted glasses, or to transpose activities from the past to today.
[+] [-] wkat4242|3 years ago|reply
[+] [-] cf100clunk|3 years ago|reply
[+] [-] MomoXenosaga|3 years ago|reply
[+] [-] flakeoil|3 years ago|reply
I'm curious, to which companies/products has Philips sold their name to?
[+] [-] eecc|3 years ago|reply
[+] [-] polyamid23|3 years ago|reply
[+] [-] wallaBBB|3 years ago|reply
What happened to Phillips is something that proved beneficial in the long run.
Legacy of Philips is now ASML, NxP, pretty good startup scene in Eindhoven, and a few other companies. The only victim here is the name. If Philips tried to move as one company they would have probably dragged down their chip related businesses by siphoning money into the fields they were losing.
Of course one could argue that the company under Philips name should have chose different direction and spun off consumer or medical market, but at the end of the day it's just a name.
I believe in hindsight this will be a way better outcome for everyone than the one we'll see from big tech if they're not broken up. There are already too many examples of them killing competition by leveraging their monopolies or buying it up and killing it off.
[+] [-] DoingIsLearning|3 years ago|reply
Effectively it's a zero risk venture for big corp companies that depend on innovation, they don't have to sink money in research projects in their own R&D labs. Just find someone with something interesting which has already been de-risked, with proven feasibility, buy them out and develop for manufacturing.
For clarity all big MedTech companies are doing this not just Philips.
[+] [-] acd|3 years ago|reply
[+] [-] teekert|3 years ago|reply
Edit: Should have watched the movie first. To answer my question: I guess we don't. And, it's electronics not tech indeed, otherwise it could have included Siemens for example.
[+] [-] pavlov|3 years ago|reply
In that sense Philips’s legacy still underpins every smartphone and computer today.
[+] [-] Zetobal|3 years ago|reply
[+] [-] mothsonasloth|3 years ago|reply
[+] [-] coldtea|3 years ago|reply
Also not exactly a Phillips level giant (Phillips does 4-5 times as much revenue today, and was doing even more compared to Beko in better days).
[+] [-] ibz|3 years ago|reply
[+] [-] rbanffy|3 years ago|reply
The building now hosts the biggest datacenter of one of the largest Brazilian hosting companies.
Too many companies moved from making things to licensing technology and brands, forgetting that the best way to get valuable technologies and brands is by making things.
[+] [-] stevenjgarner|3 years ago|reply
Isn't this disingenuous? Phillips owns a 24% stake, or 99 million shares, in ASML. Philips is granting the underwriters an option for up to nine million shares. Philips also still holds about 1.3 billion TSMC shares, representing approximately 5.0 percent of TSMC’s issued stock.
ASML is a monopoly that is literally the only supplier for most cutting edge equipment used by semi-conductor fabs globally (TSML, Intel, etc). They make it all possible. In this regard, Phillips has become more of a holding company than an electronics operation itself.
[+] [-] zeristor|3 years ago|reply
[+] [-] throwayyy479087|3 years ago|reply
Inertia kills economies, dynamism drive them. I see a lot of cultural acceptance of "the way it's always been done" here.
[+] [-] jug|3 years ago|reply
Check out the end user ratings and product diversity on Prisjakt, the main price comparison site in Sweden.
https://i.imgur.com/A2j7mYi.png
That is a very high bar.
Sure, they sold out their production but their brand name is pretty strong.
[+] [-] LeanderK|3 years ago|reply
[+] [-] permo-w|3 years ago|reply
[+] [-] lashkhi|3 years ago|reply
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[+] [-] pvaldes|3 years ago|reply
[+] [-] DeathArrow|3 years ago|reply