Philips to sell Automotive Playback Modules manufacturing activities to Lite-On

Thursday, December 28, 2006 - Amsterdam, Netherlands – Roy al Philips Electronics (NYSE:PHG, AEX:PHI) today announced an agreement to sell the manufacturing operations of the Philips Automotive Playback Modules (APM) business to Lite-On IT Corporation of Taiwan for an undisclosed amount. The remaining APM operations will be transferred to a joint-venture between the two companies, which will operate under the name Philips & Lite-On Digital Solutions, or PLDS.

APM is a leading developer, manufacturer and supplier of CD and DVD playback modules to suppliers of automotive entertainment systems. The manufacturing operations that will be sold to Lite-On IT are mainly located in Györ, Hungary. The activities that will be transferred to PLDS include research & development, marketing & sales and product management activities, which are primarily located in Wetzlar, Germany.



The APM operations are considered a non-core activity for Philips, forming part of its Corporate Investments portfolio. This transaction represents another step Philips is taking to focus on its Healthcare, Lifestyle and Technology activities supported by the strength of the Philips brand.



In PLDS, Lite-On will replace BenQ Corporation of Taiwan as partner in a joint venture now operating under the name Philips & BenQ Digital Storage, or PBDS. Upon completion of this transaction, PBDS will be renamed PLDS.



PLDS will continue to develop, market and sell products to store digital information such as DVD burners and optical drives for the automotive market, with manufacturing outsourced to Lite-On IT and third parties.



This transaction is expected to close in March 2007, subject to customary regulatory approvals and conditions.

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a global leader in healthcare, lifestyle and technology, delivering products, services and solutions through the brand promise of “sense and simplicity”. Headquartered in the Netherlands, Philips employs approximately 126,000 employees in more than 60 countries worldwide. With sales of EUR 30.4 billion in 2005, the company is a market leader in medical diagnostic imaging and patient monitoring systems, energy efficient lighting solutions, personal care and home appliances, as well as consumer electronics. News from Philips is located at www.philips.com/newscenter.

Forward-looking statements

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.

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Jeannet Harpe

Philips Corporate Communications

Royal Philips Electronics

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