Philips: Beyond Trauma?
WHITEFRIARS recent trip to the Netherlands allowed us the opportunity to re-engage with senior personnel at Philips NV following its recent period of turbulence. To recap, the venerable and respected electronics giant founded in Eindhoven in 1891, has endured possibly the most traumatic period in its long and august history following a recall in 2021 of its sleep and respiratory care devices owing to safety concerns. Tests aired worries about the PE-PUR (polyester-based polyurethane) sound abatement foam used within the devices, which was found to be subject to potential degradation (crumbling), in which small particles could be inhaled by patients.
Philips found itself under ferocious scrutiny with thousands of legal claims alleging a carcinogenic link to the degraded foam. Investors became increasingly frustrated at poor communication by the company and a sense of floundering by management over potentially uncapped liabilities. In 2024, Philips paid $479m in class action settlements, and a regulatory fine of $1.1bn to close outstanding liabilities, without accepting fault1. For Philips, a company founded on integrity and innovation, this has been a painful and costly experience; the share price has still failed to recover from highs of around €46 in 2021, to just above €212 where it languishes today.
Think of Philips and many will still probably associate the Dutch giant with televisions, lighting and personal care products. However, Philips has been through a seismic transformation this century, divesting businesses it has been closely identified with for decades. This started as long ago as the 1990s with the sale of Polygram, exiting the film and music industry. This then ramped up with divestment of televisions (2012-2014), lighting (2016), and of kitchen, coffee and home care garment products in 2021. This aggressive transformation was part of a new strategic vision to re-focus the company as a pure-play medical imaging, patient monitoring and digital health giant. We were delighted to be shown their latest diagnostic and monitoring machines, which are on show in an exhibition space at Philips brand new head office in Amsterdam.
Innovation lies at the heart of companies operating in this part of the medical sector, where despite barriers to entry, competition is fierce with the likes of Siemens, GE and ICU Medical all operating in the sector. Philips now has excellence across six technology disciplines: patient monitoring; ultrasound; image-guided therapy; diagnostic and clinical informatics; magnetic resonance imaging and computed tomography.
This last area is a good example of how Philips is harnessing cutting edge technologies such as AI to elevate clinical insights within ‘traditional’ CT scanners. This includes lifecycle learning (remote support), radiotherapy oncology and software that provides simulation and therapy support. Equally cutting edge, is the approach to sustainability, where cost effective, but enhanced refurbishments of older models are carried out and returned to use. This is all part of Philips aim to increase ‘circular economy’ products, which hit 27.9% of revenues in 2025, comfortably ahead of the 25% target3.
An area WHITEFRIARS is particularly attuned to is Philips’ focus on women’s and maternal health innovation as a discrete discipline. Leveraging artificial intelligence, cloud-based monitoring, and portable ultrasound technology, Philips aims to improve clinical outcomes and bridge gaps in maternal care globally. The Philips Avalon foetal and maternal monitoring portfolio allows clinicians to track vital signs of mother and foetus simultaneously. Wireless patch technology enables continuous monitoring while allowing the mother’s freedom of movement. Enterprise software aggregates data across care settings, helping obstetrics teams identify any early complications, such as pre-eclampsia or foetal distress.
Of equal interest to WHITEFRIARS is Philips targeting underserved (rural) communities through scalable digital health solutions. For instance, the company’s ‘Lumify’ handheld ultrasound connects to standard smartphones and tablets, bringing high-resolution diagnostic imaging to remote clinics that lack traditional hospital-based infrastructure. In partnership with humanitarian organizations and governments, Philips integrates portable devices with AI-driven software to guide non-specialist healthcare workers through obstetric scans. This dramatically increases early detection in high-risk pregnancies, with a demonstrable impact on mortality outcomes in low and middle-income countries. This is all part of Philips commitment to improve 400m lives in medically neglected communities by 2030.
Philips is also extending its maternal focus into the home itself with the Avent digital health ecosystem. By utilizing data-driven applications like ‘Pregnancy+’, the company provides millions of parents with evidence-based information, tracking tools, and direct lines of communication to healthcare providers throughout the pregnancy. This holistic approach which spans hospital diagnostics, portable remote tools, and consumer health applications is redefining and improving the predictive potential for positive maternal outcomes.
Philips exhibits material social impact benefits, already improving over 2 billion lives, and now targeting an improvement to the health and wellbeing of 2.5 billion people by 20304. Moreover, strong environmental credentials have been a part of Philips DNA for decades. The company is carbon neutral, with over 90% reduction in main Scope I & II emissions from a 2015 baseline. Other targets have been set to reduce water use, virgin materials in manufacturing and to have a net positive impact on nature.
Philips long history of innovation has given us the audio cassette, compact discs (co-developed), VCRs, energy saving lamps (the precursor to today’s LCD lamps) and the world’s first commercial shielded X-Ray tube. Today this great symbol of Dutch engineering excellence is redefining areas of healthcare potential by utilising the latest, cutting-edge diagnostic and monitoring technology. We think Philips is now ready to progress ‘beyond trauma’ to fulfil its leading role as an exciting pure play health technology company.
Notes:
1https://www.bbc.co.uk/news/articles/cn3dv3273dlo and https://www.seegerweiss.com/product-liability/philips-cpap-recall-litigation/
2 Historic share-price of €46 in June 2021 versus €21 on 21 September 2026
