Bird -- the Number One Local Chinese Cellular Phone Manufacturer -- Selects Semiconductor System Solution From Philips for GSM Phones.

Business Editors/High-Tech Writers

Royal Philips Electronics (NYSE:PHG) (AEX:PHI) and Bird -- the largest producer of cellular phones in China -- today announced the start of a long-term partnership focused on the advancement of GSM handset designs. The first development project based on the companies' joint efforts will result in the creation of a leading-edge clamshell phone targeted to the Chinese market.

Bird's new GSM mobile handset will be based on Philips' proven semiconductor system solution. Engineers from Bird will work in close cooperation with a local Philips team in China to adapt the semiconductor company's established technology into the design. Bird and Philips have successfully partnered in the past and are currently working on a CDMA system solution together with Holley Communication.

"The design flexibility enabled by Philips' system solution made Philips the best partner for Bird in its drive for new GSM phone designs," said Mr. Xu, Vice GM of Bird Co. Ltd. "We look forward to working with Philips on this design project and anticipate that a large number of these state-of-the art phones will be in wide use by 2003. This is a long-term collaboration that will increase Bird's design capabilities and bring innovative, technologically advanced cellular handset designs to market."

"Our mature semiconductor system solution offers full RF, baseband and antenna functionality in a single easy to design-in system," said Adrian Chu, Director, AP Communications Market Segment at Philips Semiconductors. "The solution offers handset designers and OEMs fast time to market when developing mobile phones. We are delighted to be working with Bird on a clamshell design based on our GSM system solution."

Exact specifications of the new phone are currently being set by the project's design and engineering team.

Bird, which is located in NingBo, is one of the top electronic enterprises in China. Founded in 1992, it is primarily focused on the development and manufacture of communication products but is a diverse operation that also makes pagers, handheld PC, equipment systems and mobile phone accessories. Bird anticipates the shipment of approximately 5 million mobile phones during 2002.

About Philips

Royal Philips Electronics of the Netherlands is one of the world's biggest electronics companies and Europe's largest, with sales of $28.8 billion (EUR 32.3 billion) in 2001. It is a global leader in color television sets, lighting, electric shavers, medical diagnostic imaging and patient monitoring, and one-chip TV products. Its 186,000 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors, and medical systems. Philips is quoted on the NYSE (symbol: PHG), London, Frankfurt, Amsterdam and other stock exchanges. News from Philips is located at www.semiconductors.philips.com.