Philips backs out of plans to sell navigation devices

 

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By Reuters

Posted on 5 Dec 2006 at 13:12

Philips has shelved plans to make mobile personal navigation systems, the chief executive of Philips' consumer electronics unit said today.

Rudy Provoost of Philips told analysts at a meeting that Europe's biggest consumer electronics producer would not enter the market for navigation devices, citing existing competition and the low profitability of introducing a new product in a saturated market.

Shares in the route-finding market leader, the Dutch company TomTom, were boosted as a result on Amsterdam's blue-chip AEX index.

Philips had said in June that it was planning to make its own navigation devices, which would weigh 160 grams and be 2 centimetres thick. The announcement weighed on shares of TomTom at the time.

Philips had been planning to introduce the devices, priced at around 400 euros ($533), in Europe from September, but no products had appeared on shelves of retailers.

Philips was not the first mainstream consumer-electronics company to have look at the market for standalone navigation devices. Japan's Sony entered the European market earlier this year after specialized niche players such as TomTom and Garmin created a booming industry. Nokia also entered the car-navigation market in October.