PHILIPS BUSINESS COMMUNICATIONS ENTERS FRENCH MARKET

Philips Business Communications enters French market

Hilversum, April 14, 2005 - Philips Business Communications (PBC), a division of Philips Royal Electronics (AEX: PHI, NYSE: PHG) and leading supplier of communications systems, today launched its activity on French soil with the opening of an office in Suresnes, in the Paris region.

With over 50 years of experience in telecommunications, a worldwide presence and an installed base of 12 million users in over 50 000 companies, the division PBC counts on making its mark rapidly in France and to be included among the top players.

The French subsidiary is headed up by Harry Zarrouk and has a solid sales and support team already operational, all benefiting from wide experience in the sector.

France - a strategic challenge for PBC
“The timing is right – today the French market is completely liberalised and open and French companies are currently renewing their telephone systems. We need to seize the opportunity and capitalise on our 50 years of experience in enterprise communication networking and our strong installed base worldwide”, says Harry Zarrouk.

The key reasons for Philips launching in France are:

• The geographical situation – at the heart of Europe, France is a strategic potential for expansion for PBC in line with the company’s growth ambition
• Projects are increasingly pan-European and presence and support in France is importan/li>
• Analyst consensus on the potential of the French market. TOIP is expected to grow by 70% in 2005

“According to Gartner, France is rated third in Europe in VOIP sales and IDC confirms that 50% of telecom investments will in 2008 be in this new technology. In this context and based on the success of Philips Business Communications worldwide, we clearly have an opportunity, not only due to our innovative technology but also to our expertise. We expect to grow faster than the market, and in three years to have a 6% market share in France” adds Harry Zarrouk.

A range of solutions adapted to all needs – from the SMBs to large enterprises
Philips’ SOPHO range of enterprise communications systems, based on own development and a strategic partnership with NEC of Japan, includes two key product platforms for the French market: SOPHO IPK and SOPHO 2000 IPS.

• SOPHO IPK is designed for SMBs (Small and Medium-sized Business) and is particularly suitable for companies requiring 20 to 100 terminals
• SOPHO 2000 IPS is designed for companies requiring 50 to 1000 terminals

The offered solutions excel in ergonomics, support a wide array of applications and include functionality accommodating for all business needs. PBC has an extensive range of solutions including reliable vocal switching, web portals communication, IP telephony, unified messaging, integrated call centers, wireless telephony and networking connectivity.

The Mission statement of the company is expressed in three major points:

• Help companies to migrate to the voice/data convergencespectrum
• Offer hybrid and IP communication platforms designed for high availability, scalability and progressive migration towards 100% IP
• Offer applications that lower operational costs, maximise the value add of enterprise applications and provide optimised management.

“For Philips, the message is clear: Migration from traditional solutions towards IP should be as transparent as possible for the end user. The PBC solutions match these expectations perfectly with the possibility to choose either a mixed or a full IP solution” continues Harry Zarrouk.

100% indirect
High on the priority list for PBC France, is the creation of a partner channel both reliable and competent. This will include a distributor, a network of ASPs, integrators and telecom operators.

The company’s Business Partner Programme for France was launched in January 2005 and is based on a sophisticated model of indirect sales applicable to the EMEA region (Europe, Middle East, Africa). The value added resellers in this region have access to all the same tools, the same level of information, resources and price policy as all other partners throughout the region. There are three levels to the programme: Business Partners addressing the SMB sector, Solutions Partners selling to small, medium and large companies, and Advanced Solution Partners addressing all types of companies.

Partner training includes the certification of teams and both technical and sales support. Partners will benefit from 3 years of support service from Philips.

“This is excellent news for French companies and resellers, who can now benefit from Philips’ attractive enterprise telecommunications portfolio, and for Philips it means that the company is even better positioned to serve its multinational customers worldwide”, concludes Harry Zarrouk.