Like many CEOs of multinational companies, Keci Lei, President and CEO of Royal Philips Electronics Group, is also a frequent visitor to China. I will come to China once in four or five months. However, the Shanghai debut on April 20th is somewhat different: it was not because of the celebration of “20 Years at Philips Chinaâ€, but he brought Philips to be the leading representative of lighting, semiconductors, consumer electronics and small appliances. For the first time, the company's senior executives appeared in the form of "a Philips." There are still many questions with Ke Cilei, such as the sharp decline in net profit in the previous quarter and the attitude towards intellectual property. The payment of the patent fee is the education of the International Herald Tribune (hereinafter referred to as "the country"): It is said that Philips can profit hundreds of millions of euros per year from its own intellectual property rights. Is this true? Ke Cilei (hereinafter referred to as "Ke"): Since the mid-1990s, patent licensing fees have increased at a rate of 10% per year. The company's goal is to continue to maintain this increase. Patent revenue has now become Philips' profit center. In the future, we will continue to outsource the production of consumer electronics. Philips is only responsible for product marketing and marketing. Product development based on market needs will become the focus of work. Completely transform Philips from manufacturing and manufacturing to market-oriented. "Country": However, in terms of DVD patent fees, Chinese companies do not agree with some of Philips' practices. Ke: This requires two efforts. On the one hand, we need to understand the ideas of local companies; on the other hand, they need to understand the rules of international intellectual property. Imagine that when it comes to paying money, I am sure that everyone is not willing, but because of the existence of the law, intellectual property rights must be protected. I think this requires an educational process. "Country": Philips has so many intellectual property rights, how to operate? Ke: Different business units of Philips have different intellectual property policies. In some cases, we maintain our intellectual property or patents in order to obtain a bigger market. Of course, it is not necessary to create a standard in all markets. In the case of the Philips razor, we do not disclose the patent for the Philips razor, as the razor industry does not need to set a standard. In other areas, such as CDs and DVDs, there must be a standard, including encoding format, media media, etc., so that the product can be played on all players. So sometimes it is necessary to integrate the company's own intellectual property with the intellectual property of other companies, such as TD-SCDMA. As time goes by, the status of intellectual property is constantly changing. If you create a market, as the market matures and changes, you may be concerned about new markets, so the old market is the harvest. For example, CD, CD has now been replaced by DVD, DVD may be replaced by "Blu-ray" technology. Philips hopes to continue to lead the development of these technologies, and only by setting standards can be at the forefront of technology, so Philips has a corresponding strategy for intellectual property to meet the needs of the business. The brand is a long-term thing. "Country": Philips' net profit fell nearly 80% in the last quarter. Why is this? Ke: This is related to the business performance of various departments. In fact, most of the business is flat compared with the same period last year. However, the semiconductor industry is weak this year, and semiconductors are on the rise last year. "Country": After you took office, Philips is in constant adjustment and change. How long will the change take? Ke: The company did make a lot of adjustments, adjusted the organizational structure, and focused on profitability. Our goal is to achieve steady growth in all sectors, making us a company that is valuable to our customers. This is what we will do in the future, focusing on our customers. "Country": Philips launched a new brand promotion in the second half of last year. Has the effect of the new brand strategy been reflected? Ke: The repositioning of the brand is not something that can happen overnight. If “sense and simplicity†is accepted by all consumers, we will have a very big improvement in the brand. Of course, it has a very big impact on the market that made a lot of advertising during the sales season in the fourth quarter of last year. But even in these markets, it is difficult for us to immediately say how much it will affect the current growth of Philips. What we do is to increase consumer recognition of the brand, strive to establish a sustainable brand positioning, and lay a solid foundation for Philips' long-term development. In the second quarter of this year, we will also launch a new brand-based positioning activity. Strengthen brand promotion.
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