Bird Ramps up Volume Shipments of New GSM Phones Based on Philips' Nexperia Cellular System Solution.

Business Editors/High-Tech Writers

SAN JOSE, Calif.--(BUSINESS WIRE)--June 23, 2003

Royal Philips Electronics (NYSE:PHG)(AEX:PHI) today announced the first results of its partnership with Bird, one of the largest producers of cellular phones in China. Bird's recently announced ultra-thin GSM S228 phone is based on Philips' proven Nexperia(TM) Cellular System Solution. Bird, a leader in software and product design, was able to complete the design, manufacture and production of this new phone in only eight months after selecting the Nexperia solution. Philips' solution is a new platform for Bird and is the first handset to use Philips' Nexperia Cellular System Solution.

Philips' state-of-the-art system solution, incorporating a core chip-set from Philips, offers cost-effective, highly integrated and fully validated technology for GSM and GPRS handset designs. These solutions range from heavily cost optimized entry-level phones to scalable multimedia phones boasting a wide range of features such as color displays, polyphony, radio, MP3, MMS and Java. Bird develops modern and cost-effective handsets for the consumer market by using the semiconductor technology and cellular systems know-how of Philips.

"Bird is one of the first companies to bring to market a state-of-the-art GSM phone in such a short amount of time," said Zhao Jian Dong, general manager of the Bird Hangzhou Research & Design Center. "The key enabler to move so fast and to take advantage of this new market opportunity was Philips' Nexperia Cellular System Solution and the training they provided to our design engineers. Our relationship with Philips is a long-term collaboration that will increase Bird's design capabilities and bring innovative, technologically advanced cellular handset designs to market."

"The success of our partnership with Bird, one of the leading local Chinese cellular phone manufacturers, underlines the strength of our Nexperia Cellular System Solution and our commitment to the worldwide cellular market. We have demonstrated our Nexperia solution can shorten the development time for handset manufacturers," said Peter Baumgartner, senior vice president Global Market Segment Mobile & Personal, Philips Semiconductors. "Bird has a very well developed distribution network throughout China, and very high brand value in these markets."

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 PCs, equipment systems and mobile phone accessories. On average, Bird manufactures fifteen million handsets each year. Bird anticipates the shipment of approximately 10 million mobile phones during 2003.

The Philips' Nexperia Cellular System Solution provides a portfolio of re-programmable system and IC solutions for mobile-based multimedia applications. These offer customers flexibility through extensive software IP libraries, which allow software upgradeability to future-proof product designs and provide a fast, low-risk and cost effective route to market. The advanced system solution comprises digital and analog baseband processing, RF, power amp and controller, power management unit and LCD driver. Its software delivery package includes the protocol stack and the technology required to create differentiating features. GSM, GPRS and AMR standards are supported at 850, 900, 1800 and 1900 MHz, making the system solution suitable for worldwide use. Also included are GPRS Class 10 capabilities and AMR (Adaptive Multi-Rate) technology - which enables GSM operators to deliver consistent speech quality.

About Bird

Bird is located in Fenghua, Ningbo City, China, and has 10,000 employees. The company, which originally manufactured pagers, has grown to become a manufacturer of a wide range of communications products including mobile phones and handheld PCs. The company sold 2.84 million handsets in 2001, and had a turnover of 3.2 billion RMB. This grew to seven million handsets in 2002 with a turnover of seven billion RMB. The company has net assets worth 1.05 billion RMB. Bird has R&D facilities with the ability to develop a variety of technologies, including those for GSM and CDMA mobile phones. These facilities, which have over 200 experienced engineers between them, are located in the cities of Ningbo, Hangzhou and Zhongqing. The company has its own sales network which consists of 28 branch companies, 300 sales offices and more than 50,000 shops covering all of China. Bird also exports mobile phones to Europe, South Africa, South-East Asia, the Middle East and India, with total exports reaching 500,000 handsets in 2002.

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 31.8 billion in 2002. It is a global leader in color television sets, lighting, electric shavers, medical diagnostic imaging and patient monitoring, and one-chip TV products. Its 166,000 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

Nexperia(TM) is a trademark of Koninklijke Philips Electronics N.V.