Sustained product innovation has been a hallmark of Philips Lighting North America for thirty years. Indeed, innovation is a deeply ingrained value of our culture, one that has its roots in the companies that comprise Philips Lighting North America and that guides the company’s product development strategies going forward.

Within product development we see three opportunities as prime targets: energy, new light sources, and lighting-integrated electronics. They are clearly related, but each provides its own dynamic for sustained product innovation.

Energy has been a consistent theme in Philips Lighting North America product development for all brands. And the opportunity continues to grow as various states enact energy codes that are more restrictive and as incentives, such as the tax deductions in EPACT 2005 and resurgent demand-side management programs, spur demand.

Recent introductions offer energy-conscious customers fluorescent products with superior efficiency and thus the ability to achieve desired lighting results with less power consumption. Typical applications include offices, schools, warehouses, and factories in both new construction and renovation.

In the residential and decorative lighting markets, where most products still use inefficient incandescent light sources, Philips Lighting North America has expanded its offerings with new fixtures that incorporate energy-saving fluorescent sources without sacrificing the style that customers prefer.

In the area of light sources, LED’s (light emitting diodes) represent a fast-evolving opportunity, with rapidly improving technology and growing market interest. These

solid-state devices have already surpassed the efficiency of incandescent and are gaining on fluorescent and other efficient light sources.

Electronics have transformed entertainment lighting, pioneered by Vari*Lite’s original moving lights. Now the frontier is moving into architectural applications, where integrated controls make possible the economical dimming of individual office fixtures, occupancy-based switching, daylight harvesting, or local-area switching. These advanced control technologies are particularly useful for buildings designed to sustainable principles.