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Philips Launches New Wave of Brand Advertising Campaign; Innovative Campaign Continues to Promote Image of Healthcare, Lifestyle and Technology Company and 'Sense and Simplicity'

Business Wire, May 16, 2005

NEW YORK -- Royal Philips Electronics (NYSE: PHG, AEX: PHI) today announced the launch of the second wave of its brand campaign based on the concept of 'Sense and Simplicity'. The advertisements are designed to give customers a distinctive image of a sharper, more focused enterprise, which - throughout its activities in healthcare, lifestyle and technology - is held together by a common drive to deliver simpler end-user experiences. The company will spend more than $100 million between April and June 2005 to bring its message to customers in 11 key markets around the world. At an annualized rate, this is comparable to the world's most influential campaigns.

Paul Zeven, CEO of Philips Electronics North America, commented: "At the launch of our brand positioning campaign in September last year, I said we wanted to change the way the world sees and experiences Philips. That change is happening. We've analyzed the independent data from the first wave of our campaign, and what is clear is our customers are more aware of the Philips business portfolio of healthcare, lifestyle and technology. The advertisements also generated a far stronger spontaneous association of Philips with simplicity."

Advertising campaign

The next wave of the brand campaign will again focus firmly on a core target group consisting of the 20 percent of people who do 80 percent of the buying, typically affluent decision-makers in the 35-54 age range and A/B category. "The reason these people are so interesting to Philips is because they are in a position to make buying decisions in both their personal and professional lives," Zeven said. "What this means is that the person who makes a decision on a top-of-the-range flat TV for his or her home could also be a manager responsible for the purchase of diagnostic equipment at a local hospital."

The integrated campaign starts on May 16 in the U.S. and will run through the end of June. The media investment exceeds $25 million and will include network and cable television advertising, magazine and newspaper print ads, an online component, as well as airport advertising in selected cities.

The second wave of the campaign was developed together with DDB, Philips' global advertising agency, and media buyers, Carat, and features existing Philips products that fulfill the new 'Sense and Simplicity' brand positioning. It will also run via broadcast, print and online in China, France, Germany, Italy, the Netherlands and the U.K. in addition to four new markets featuring the original creative executions: Brazil, India, Russia and Spain. The global reach of some of the media will also give the campaign a wider impact with opinion leaders.

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is one of the world's biggest electronics companies and Europe's largest, with sales of $ 37.66 Billion (EUR 30.3 billion) in 2004. With activities in the three interlocking domains of healthcare, lifestyle and technology and 160,900 employees in more than 60 countries, it has market leadership positions in medical diagnostic imaging and patient monitoring, color television sets, electric shavers, lighting and silicon system solutions. News from Philips is located at www.philips.com/newscenter.> Safe harbor statement

This release may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.