Date: October 22, 2002

Philips introduces world's first DVD+R/+RW digital video recorder reference design

Total solution enables DVD player manufacturers to introduce consumer DVD recorders at the January 2003 CES Show

Eindhoven, The Netherlands, 22 October 2002 - Royal Philips Electronics (NYSE: PHG, AEX: PHI) today announced the launch of the world's first DVD+R/+RW reference design, which will enable DVD player manufacturers to introduce consumer electronics DVD+R/+RW recorders against competitive price points, quickly opening up the large volume market. The design is based upon the Nexperia™ system solutions, and comprises the pnx7100 MPEG2 Audio Video Graphics CODEC announced in May 2002 and Philips' VAE8020 DVD+R/+RW video recorder engine. Philips' solution is industry proven and will comply in every way to the DVD+R/+RW standard.

"The DVD+RW format has the opportunity to penetrate the consumer electronics and PC markets rapidly. With the backing of major manufacturers in both arenas, rewriteable DVDs offer a true bridge between consumer electronics and PC electronics, unlocking the potential of both multimedia architectures," said Paul O'Donovan, Senior Analyst at Gartner Dataquest. The key to penetrating the consumer electronics market is both price and ease of use. Philips' DVD+R/+RW reference design offers consumers both qualities through simply adding a recording button to the well-known DVD player interface and keeping costs at consumer levels.

"Philips' semiconductor division is the number one in DVD+R/+RW recorder chips. We were the first to market - every DVD+RW in the world today is shipping with Nexperia - And now we are the first company to offer a complete reference design for DVD+R/+RW digital video recorders," said Jeroen Keunen, head of consumer and multimedia at Philips Semiconductors in Asia Pacific. "Due to the highest level of integration, our unique solution will enable DVD manufacturers to quickly participate in the fast-growing consumer DVD Recording market. Time to market is of the utmost importance and our solution will enable our customers to demonstrate their DVD+R/+RW Digital Video Recorders at the January 2003 CES Show in Las Vegas."

The DVD+RW software stack is under development together with leading members of the DVD+RW alliance, guaranteeing compliance to the DVD+R/+RW industry standard. DVD+R/+RW is the de-facto standard for DVD recording, developed and supported by leading companies in the PC and consumer electronics industry - including HP, Dell, Microsoft, Sony, Thomson and Philips. DVD+R/+RW is designed with end-user requirements in mind, offering unique features like highest picture quality (based upon variable bit rate technology), editing on disk and instant usability (no formatting or finalisation is required). DVD+R/+RW is the rewriteable format that provides superior compatibility with existing DVD-Video players and DVD-ROM drives.

The main building blocks that make up the reference design are the pnx7100 and the VAE8020. The pnx7100 chip demonstrates high quality MPEG2 encoding, decoding and transcoding capabilities and includes a high performance MIPS CPU core, which is based on the NexperiaTM platform. The encoder function on the pnx7100 includes a video-input processor, a video encoder, an audio encoder, an IEEE 1394 interface and a software multiplexer. The pnx7100 is prepared for digital rights management.

The VAE8020 is the second-generation of the industry's first dedicated DVD+RW video recorder engine and the central component to be used as the main building block in consumer electronics DVD+R/+RW video recorders. The engine consists of a DVD+RW mechanism with dual laser optical pick-up unit, a tray loader with fan unit and a PCB containing all the electronics for module control and channel encoding/decoding. It is also capable of reading/writing DVD+R write-once media.

The reference design is currently available to selected customers. Volume production is scheduled for Q2 2003.

About Philips
Royal Philips Electronics of the Netherlands is one of the world's biggest electronics companies and Europe's largest, with sales of 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 184,000 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.