Economy

After Nokia, Will Dutch Giant Philips Be Europe's Next Electronics Brand To Implode?

Europe’s consumer electronics industry is already reeling from the recent disastrous showing of Nokia. Now Philips has announced it would stop making televisions, another sign that the historic brand is struggling to compete.

Philips light sign in Singapore (chuwasg)
Philips light sign in Singapore (chuwasg)

Europe's consumer electronics industry is growing dimmer by the day. First there was Finnish communications giant Nokia, whose profits tumbled 31% between April and June. Now, the Netherlands' Philips appears to be in serious trouble as well, according to its latest financial results.

The Dutch company announced that its sales will probably be lower than expected in two out of its three primary areas, lightning and consumer electronics. The downturn is mostly due to weak demand in Europe and the United States.

Philips' financial difficulties have been caused by the firm's intrinsic performance, but above all by weak consumption. There is no prospect of a very rosy picture for the European consumer goods industry. European people buy fewer electric razors and toothbrushes, and municipalities no longer have money to modernize theirs lightning systems.

What makes things worse is that 10 years ago, Philips decided to pull out from non-core sectors to focus on its three key fields of expertise. The company stopped, for example, manufacturing electronic components and mobile phones. Instead it stuck with electric razors, lightning and health care, sectors that are supposedly immune to recession.

Now Philips has stopped making televisions as well – its most dramatic demonstration to date that it is committed to its policy of refocusing. The company's approach over the past decade was hailed as a model for other electronics conglomerates to emulate. Not everyone did, however. Siemens, a German engineering conglomerate, continues to focus on equipment products.

What is happening to Philips lightning is particularly worrying because it is a field that is undergoing an electronic revolution with the introduction of LEDs (Light-Emitting Diodes). The new technology was supposed to make the industry expand. But competition from Asia competition and the slow progress of adopting new technologies is hindering its momentum.

The European industry, which was already taken aback by Nokia's incredible fall, did not need this extra headache. Philips has not made the same strategic mistakes as Nokia. It has not thrown itself at the feet of an American company in order to save itself from wreckage. Nonetheless, some observers are wondering whether Philips is going to meet with the same fate as Nokia. The next few months could prove to be critical for the company's future.

Read the original article in French.

Photo - chuwasg

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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