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Delivering in Consumer
Leon HussonExecutive Vice President Consumer BusinessesSemiconductor Division
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Semiconductors 2
Delivering in consumer
• The last 12 months• Philips Semiconductors consumer businesses• Recent developments in Nexperia Home• Audio• Summary
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Semiconductors 3
September 12, 2002what we said
Many emerging Connected Consumer applications will beunderpinned by Nexperia Home
• Our strategy for consumer business growth will be driven by a focus on:
Digital TV LCD TV DVD recorder
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Where are we today• We have delivered Nexperia
Home solutions for DTV, LCD TV and DVD recorders to leading customers
• We have strengthened our presence in China
• Our focus market areas are growing even faster– DTV is growing as expected– LCD TV is taking off fast:
130% increase in units shipped in the last 12 months (source: iSuppli)– DVD recorders are the fastest developing consumer product ever:
1.3 Million units shipped in 2002, 4.6 Million in 2003• DVD+RW is the leading standard in Audio/Video in Europe• DVD+RW is the de-facto standard in the PC industry
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Semiconductors 5
Delivering in consumer
• The last 12 months• Philips Semiconductors consumer businesses• Recent developments in Nexperia Home• Audio• Summary
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Semiconductors 6
Consumer Businesstop positions
Source: Philips, 2003
TV
DVD Recorder
Media access (tuners/decoders)
Digital audio
Car access
Car infotainment
#1
#3
#1
#2
#1
#2
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Semiconductors 7
Consumer Businessby application
Source: Philips, 2003
Digital CTV4%
New display technology
DVD Recorder 7%
Automotive 21%
Remaining 11%
Audio 10%
Analog CTV38%
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Semiconductors 8
Consumer Businessby region
Greater China28%
Asia (excl. China)29%
Europe33%
America10%
Source: Philips, 2003
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Semiconductors 9
Delivering in consumer
• The last 12 months• Philips Semiconductors consumer businesses• Recent developments in Nexperia Home• Audio• Summary
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Semiconductors 10
0
20
40
60
80
100
120
140
160
180
200
2003 20060
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2003 2006
DTV market growing continuously
Total TV set market - volumes Total semiconductor value
Source: I-Suppli / SRI / Philips, June 2003
Analog Digital
Mill
ion
units
$ M
illio
n
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Semiconductors 11
What is new in DTV
• Strong market drivers in DTV:– Features: Connectivity & Multimedia – Display Performance– Digital transmission: DVB-T, ATSC, ISDB
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Semiconductors 12
Governmental push for DTV
Governmental support for digital transmission
• US: FCC mandate applicable from mid 2004 / ATSC
• Europe/UK: DTV through MHP/MHEG
• Japan: launch of ISDB terrestrial by end 2003
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Semiconductors 13
Successes with Nexperia Home in DTV
Realizing major benefits• Nexperia Home enables digital receivers at
the same consumer price point as the analog equivalent
• Flexible transition from analog to digital TV– Low-cost converter boxes– IBO (Intelligent-Bolt-On) solutions for Analog TV– Fully Integrated digital TV
Philips, Sony and Sharp have recently launched new TVs based on Nexperia Home
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Semiconductors 14
0
1,000
2,000
3,000
4,000
2003 2006
LCD TV market growing rapidly
0
20
40
60
80
100
120
140
160
180
200
220
2003 2006
Total TV set market - volume Total semiconductor value
Source: I-Suppli / SRI / Philips, 3Q 2003
CRT tubes LCD panels
Mill
ion
units
$ M
illio
n
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Semiconductors 15
What is new in LCD TV
The LCD TV market is growing faster than expected:• Average selling price will fall from $ 1,750 in 2002 to $ 950 in 2004• Sweet spot moves from 15” to 20” with clear trend towards 30”
Source: I-Suppli / SRI, 3Q2003
Consumers have recognized LCD TV as a ‘must have’
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Semiconductors 16
Successes with Nexperia Home in LCD TV• LCD TV makers like Philips and Sharp have
selected Nexperia Home– We are building on our global #1 position in
One-Chip TV
• We offer full LCD TV system functionality– Tuner to display drivers– Analog and digital– Best in class picture improvement– Connectivity
• We offer complete reference designs from low-end to high-end LCD TV
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Semiconductors 17
The DVD recorder domainWe offer Nexperia Home solutions for
DVD video recorder DVD data recorder
Market is driven by costs Market is driven by speed
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Semiconductors 18
The sharp increase in worldwide DVD video player and recorder shipments by segment and product, 2001-2006
DVD video recorder market growing rapidly
Source: IDC, 2003
Total DVD video market - volume Total semiconductor value
DVD video players DVD video recorders
Mill
ion
units
$ M
illio
n
-
500
1,000
1,500
2,000
2,500
2002 2003 2004 2005 20060
20
40
60
80
100
120
2002 2003 2004 2005 2006
CAGR 2002-2006 = 128%
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Semiconductors 19
What is new in DVD video recorders
• Low cost, basic features DVD video recorders are starting to replace the VCR
• Feature rich DVD video recorders are evolving into home entertainment centers through: – Connectivity and hard disc– Home theater in a box
functionality0
500
1000
1500
2000
2500
2002 2003 2004 2005 2006
$ M
illio
nVCR
DVD videorecorders
Source: I-Suppli / IDC, 2003
Total semiconductor value
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Semiconductors 20
DVD data recorder market grows rapidly
Source: IDC, 2003
Total DVD data market - volume Total semiconductor value
DVD data players DVD data recorders
Mill
ion
units
$ M
illio
n
-
500
1,000
1,500
2,000
3,000
2002 2003 2004 2005 20060
10
20
30
40
50
70
2002 2003 2004 2005 2006
602,500
CAGR 2002-2006 = 58%
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Semiconductors 21
What is new in DVD data recorders
• DVD+RW has become the de-facto standard– Endorsed by HP, Dell and Microsoft
• DVD+RW data market is moving fast into mainstream PC
• Global market will double from 2003 to 2004
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Semiconductors 22
Successes with NexperiaHome in DVD recorders
• 28% of all DVD video recorders sold in 2003 will be based on Nexperia Home– 7 out of 10 DVD+RW video recorders based on
Nexperia Home
• We will have 30% share of the DVD data recorder market by Q4 2003
• PC leaders like HP acquire drives from our customers
• We are leading the speed race:
2004Q2 2004Q12003Q32003Q2
16X12X8X4X
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Semiconductors 23
Nexperia Home and Connectivity
• We offer flash memory connectivity like Memory Stick on Nexperia Home
• Nexperia Home enables flexible feature integration:– Access to broadband content
– Content editing
• Nexperia Home can bridge the PC-CE gap– Software media processing addresses all evolving
standards
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Semiconductors 24
Delivering in consumer
• The last 12 months• Philips Semiconductors consumer businesses• Recent developments in Nexperia Home• Audio• Summary
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Semiconductors 25
AudioEnhancing the consumer experience • 1 out of 3 cars worldwide
includes Philips car radio chipsets• 1 out of 4 MP3 players
has a Nexperia solution that entertains you on the go
• 1 out of 4 Home Theater in a Box uses our Class-D amplifiers to rock you at home
• 1 out of 3 TV’s in the world uses our audio amplifiers
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Semiconductors 26
Delivering in consumer
• The last 12 months• Philips Semiconductors consumer businesses• Recent developments in Nexperia Home• Audio• Summary
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Summary
Nexperia Home:• Delivers Connected Consumer applications at the
right consumer price point• Enables flexible and cost effective solutions for
– The transition from analog to digital TV for all display formats– DVD recorders from low-cost VCR replacement to
home entertainment hubs– Integration of a broad range of features from picture
processing, connectivity, content editing to browsing • Is selected by leading customers
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