(Reuters) — Royal Philips (NYSE:PHG) will emerge from its radical transition away from the lighting industry as a more profitable company focused on consumer healthcare, the head of the group’s personal health business told Reuters.
The Dutch conglomerate, which is shedding its lighting business and LED components operation, aims to tap a growing market for consumer medical devices and boost profitability through the provision of health data services, Pieter Nota said at the IFA electronics trade show in Berlin.
While German rival Siemens (NYSE:SI) is gradually distancing itself from healthcare in line with its general move away from consumer businesses, Philips sees the consumerization of healthcare as a growth opportunity.
“We are in a unique position to use our experience from our professional healthcare business for our personal healthcare business,” Nota said after the company used the Berlin show to announce a range of initiatives to move healthcare from hospitals into homes and the everyday lives of its customers.
Research firm IHS estimates that the market for consumer medical devices could reach almost $11 billion in 2017, from $7.9 billion in 2013, as the aging global population attaches increasing importance to health monitoring.
The Dutch company’s Berlin announcements took the wraps off a health watch, an arm and wrist blood pressure monitor and scales that also provide body mass analysis. All devices automatically transfer data to a digital platform, where it can be stored and analyzed.
“Data and data-related services will increase significantly,” Nota said. “Step by step we will develop from a company offering products into a company that offers products and services.
“Services will increase strongly … and so will our profit margins,” he said.
Nota said that he is happy with Philips’ consumer health portfolio but is keeping an eye open for potential acquisitions.
“If we can get a critical mass through an acquisition or a specific capability, we will do that deal,” he said.