"Somewhere along the way, the promise of the digital revolution to make our lives easier, simpler, better is not being delivered. In fact, in many respects, it’s only made life more complicated"
Gerard Kleisterlee, President & CEO Royal Philips

Following are excerpts from remarks delivered by Gerard Kleisterlee, President & CEO, Royal Philips Electronics, at the CEA’s “Leaders in Technology” Dinner,Las Vegas, January 9, 2004

...Thank you for having me here tonight to speak to you. I want to start with a short story. Last month, our office in New York got a call from the ABC Network television news program “20/20.” They had put a consumer in a room with all kinds of consumer electronics products, given him a universal remote control from Philips, and turned him loose. Well, you can imagine how the story goes. The person failed miserably at getting the products to work with the remote and left in frustration.

It’s unfortunate that we had to be part of that story, but it doesn’t surprise me that “20/20” saw it important to point out what is painfully obvious – too frequently, we lose our focus on the consumer in consumer electronics industry.

Somewhere along the way, the promise of the digital revolution to make our lives easier, simpler, better is not being delivered. In fact, in many respects, it’s only made life more complicated. And we are to blame. So I would like to issue a bit of a wake up call to all of us tonight. We must start making things easier for consumers or we will never see the real promise of the digital revolution come to life. And we must do it now.

Our Future in a Balance
Why Now? Because our future as an industry is in a balance.

While I’m optimistic about the future of the electronics industry and the tech sector as a whole, I see some dark clouds in front of us, and we really need to work on clearing them if we want to build new sustainable businesses. This also calls for new ways of thinking and working that will lead to entirely new business models for our industry.

I speak to you at this forum for Consumer Electronics, but you must also understand that we at Philips touch people’s lives everyday in many ways and for us simplicity is a concept we’re thinking about for all of Philips’ businesses. We are also in consumer electronics, but Philips is not a traditional consumer electronics company – rather we like to be seen by consumers and customers as a company, which is active in Healthcare, Lifestyle and Enabling Technologies.

The good news for the industry is that we are facing a nice boost in consumer electronics sales over the holiday season in new categories like flat TV, a familiar function in a compelling new form factor. However, we don’t see a similar take up of new technologies and functionalities in many other categories.

Could this be because simplicity does not prevail? Let’s look at a few statistics:

• The Yankee Group recently reported that 30 percent of all home networking products sold today are returned because the consumer can’t get them to work.

• Also, 48 percent of potential digital camera owners are delaying their purchase because they perceive the products to be too complicated.

• And finally, 25 percent – that’s the number of Americans who think they already own an HDTV. Twenty five percent. Wouldn’t that be nice? We’ve succeeded in confusing consumers about the most basic of consumer electronics products – their television.

We’re going in the wrong direction. There are many more statistics that point to the problem, but I don’t think we need to elaborate.

Read entire speech here...