TechStuff Classic: The Philips Story: Part One

originally published on January twenty, two, thousand sixteen. It is called The Phillips Story Part one that you can't guess what next week's classic episode is gonna be, Let's listen in. This is from a listener suggestion Roger actually asked this. Roger wrote, I'm an avid Tech Stuff podcast listener from the UK, especially enjoying the company histories. I have two companies that I think would be quite interesting to cover.

The first is Royal Phillips. Phillips has been an innovator since the eighteen hundreds, with everything from light bulbs through to high tech medical scanning equipment, with a few consumer items such as compact sets, video recorders, laser disc and CD DVD technology thrown in for good measure. It would be great to get the history, but I really wanted to look at Phillips and talk about the history of

this company. It is interesting because I think a lot of people when they think of electronics, they tend to think of either American companies like General Electric or Westinghouse, or they think about Japanese companies like Sony and others are along those lines, but they tend to forget that there were European companies that were instrumental in the development of electronics, and in fact, Phillips is one of those companies.

So I thought I would tackle the company history of Royal Phillips better known as just Phillips here in the USA. Although we'll get into how Phillips is changing even as I speak, Uh, that'll probably be in part two. So Part one we're gonna focus on the founding of the company and go through up to about the beginning of World War Two, or at least the Netherlands involvement in

World War Two. Because the Phillips is a company that originates from the Netherlands, the company actually takes its name from a family. The patriarch of that family was Benjamin Frederick David Phillips, who went by Frederick I'm gonna call him Freddie Baby. So Freddie Baby was born in the Netherlands on December one, eighteen thirty. He was the fourth son of a family that made its money in the tobacco trade. His father, Lyon Phillips, was very successful tobacco merchant.

Um probably merchant is being too narrowly defined. Uh. He was also a cousin to another notable person in history, Carl Marx, who was the author of the Communist Manifesto, and in fact, Marx would often call upon his relatives, the Phillips whenever he was in need of money. So while Marx was, you know, a communist and believed very much in the distribution of wealth across the workers, he was not above asking his wealthy merchant class uh distant

family for for cash when he needed it. Frederick Phillips became a banker and he was incredibly successful. He built up a really healthy fortune, and he married a woman by the name of Mary Hayliger's. By the way, there are a lot of Dutch names in this and the next podcast that I will be butchering, largely because is Dutch is similar to German, which I know a little bit of. But different enough that my instincts on how

to pronounce things are often going to be wrong. So my apologies to all of you Dutch speakers out there and really everyone else too, as I butcher these names. But I'm gonna do my best anyway. Frederick Phillips and his wife had ten children, not all of them survived to adulthood, and one of those children was a son by the name of Gerard Leonardo Frederick Phillips, best known

just as Gerard Phillips. Now, when Frederick was in his sixties, he became inspired by his son Gerard, who was interested in making carbon filaments for light bulbs. This would be around eighteen nine, and that was around when electricity was kind of on the verge of replacing gas lamps for lighting. But as we've talked about in tech stuff on previous occasions, it was really tricky to build an electric light bulb that could burn brightly enough and last long enough to

be a practical replacement for gas lamps. A lot of those early filaments would burn out very rapidly, and in fact, it was a lot of different innovators who were working in this space to try and find a way to make those filaments last long enough for an electric light bulb to really be practical. In fact, I would argue that Edison's major contribution was the development of a filament that was longer lasting than most of the predecessors. Uh,

he didn't invent the light bulb, he just improved upon it. Well. Gerard was interested in this as well, and was working very hard on trying to come up with a carbon filament that could be of practical use. And he went to his father and said, maybe we could create a company specifically for this purpose, and Frederick Phillips agreed to back his son Gerard, and they formed the Phillips and Company. They actually purchased a factory in the town of Eindhoven

to make lightbulbs. Now, at that time, Eindhoven was sort of a modest industrial town. Today it's actually known as a center of innovation and high tech scholarship, and that's largely due to the influence of the Phillips company. But it didn't take off immediately. In fact, at first the company really struggled. So Gerard was a mechanical engineer and was really good at that. He was he was very innovative,

very clever. He graduated from delf University in eighteen eighty three with a degree in mechanical engineering, and he had also worked for a company called A E G which, along with another company called Siemens and Hausk, was a dominant player in the electric lighting into street in Europe. Now, according to historical accounts, the lamps that Gerard was producing from Phillips and Company were of excellent quality. They were amazingly long lasting lamps compared to the competitors, and they're

very pretty, very beautiful design. The factory itself had twenty eight people working there and they were earning good wages comparatively speaking, so everything was going well on that end, but the business itself was not doing so well. The sales weren't reflecting the quality, and by nineteen by eighteen ninety four, rather the business was already in trouble and in fact teetering on the verge of bankruptcy. So it was founded in eighteen by eighteen ninety four, it's already shaky.

And the main problem was that Gerard Phillips, while he was an accomplished mechanical engineer, had very little business acumen. He could produce amazing work, but he had trouble managing the business side of things, and so in eighteen nine his younger brother, Anton Phillips joined the company. Now, Anton had a background in business and also was a much more outgoing personality than his brother was. Gerard was kind

of a solitary worker. He preferred to do research in the lab and have a quiet environment and avoid conversation, which he often thought of as being unnecessary and a distraction from work. Meanwhile, Anton was much more outgoing. He enjoyed socializing and networking and was sort of a born salesman. So together the two brothers were able to turn the

company around. Gerard was still the head of the company, but Anton became kind of the director of sales and uh soon orders were pouring in from all over Europe and beyond. One of the first big cli aiance of the Phillips and Company UH business was the Star of Russia. So the Russian Tsar actually purchased Phillips lamps to light

up the Winter Palace. To a pretty big deal, especially when you consider that Karl Marx was a relative very interesting experience, and there are in fact, entire books written about Karl Marx and the Phillips family and how that relationship was complicated and how the different philosophies were at play, while the Phillips family was still sympathetic at least two Marx's plight enough so that they were giving him money when he needed it. Very interesting stuff, but kind of

beyond the scope of tech stuff. I'll leave that to stuff you missed in history class. Maybe they can do an episode about Karl Marx and his relationship with the Phillips family. At any rate, Back to Phillips, UH. While Anton was becoming something of a sales legend in Europe, his brother Gerard headed up research and development back in Eindhoven. So Gerard was constantly improving designs to build better lamps, and then Anton would go and sell those designs to customers.

And because of Gerard's success, UH, and because of his his reputation as a brilliant designer, Anton was actually able to promise his clients that the company was always working on improving designs and innovating in the space. And this really became a great example of a buzzword known as synergy. You probably heard synergy a lot of times. Synergy and basically means it's the process of creating a whole that's greater than the sum of its parts. And this is

really the case with the Phillips brothers. Individually, they were both intelligent men who were quite capable in their own spheres, but together they were able to accomplish a lot more than they could have done on their own. In fact, as I just mentioned, if Gerard had not received help from his brother, it's quite possible that the Phillips Company would have gone bankrupt before they were able to really make an impact. Well. By nineteen o seven, the business

changed because carbon filaments went obsolete. There were there was a better technology in place that would last longer, it burned brighter and used the same amount of energy as carbon filaments, and that would be tungsten wire filament. So Phillips and Company switched to designing lamps that used tungsten wire. It could actually produce three times the amount of light with the same amount of electricity as a carbon filament lamp, so it made sense to make that change. We have

more to say about the Philips story. After these messages in the company was listed on the Amsterdam Stock Exchange and became a limited company called all Right, I'm gonna give it a shot, guys, but this is gonna be it's it's gonna sound like a three year old trying to sound out a word because it's it's very intimidating. So the company became known as in V Phillips glow is lump in fabric and gloile lump and fabrican is how I will say that, And all you Dutch speakers

out there can scoff at me justifiably anyway. A limited company, in case you're wondering, it's an organization made up of investors, and each of those investors is protected from liability to the extent of their own investment in the business. So, in other words, just just a simple example, if you invested ten thousand dollars in a limited company, you couldn't be held accountable for more than ten thousand dollars in

liability should something go catastrophically wrong. So really, a liability company is meant to protect the people that invest in it. Thus gives you an incentive to invest in the company because you stand to gain from your investment and you're

protected from anything really unfortunate. So, for example, if it's proven that the company uh mishandled funds in some criminal way, you have a level of protection because of the nature of that organization, assuming you're not the actual person committing the crime. In Phillips and Company established the NEAT Lab, which was a research and development facility be dedicated to innovation and improving existing technology. Now in that lab in

a T. L a b. Is actually a nickname. The full name for the facility is again, all right, the Phillips neture Kundig Laboratorium. I'm so sorry. Anyway, the center was necessary because by this time the company was beginning to explore other technologies, not just incandescent lamps. And the company also wanted to develop its own patents so it wouldn't be dependent upon third parties. So by that I mean, um, all right, So let's say that that you want to

be able to use a particular process. Well, when a person or organization receives a patent, when they filed for a pen and they're granted that patent, their design is made public. That's part of the agreement to have a process or design patented. When you do that, that particular design is publicly available. Anyone can go and pull up the patent and see how it is you're doing the thing you are doing. That's all part of the filing process.

But in return for publicly saying this is how we do things, the patent holder gets exclusive rights to use that particular design or approach in whatever way they want for a given amount of time, and that given amount of time has changed over the years. But it essentially says that for x amount of years, you get exclusive rights to this design. You can do whatever you want with it, and if anyone else uses that same design

without your permission, you can sue them for infringement. So the design is publicly available, which gives the protection gives protection to the person who holds the patent because then they can say, well, clearly, you stole my idea because my idea is publicly available for you to read. But I am protected. I can use that idea exclusively, and

I did not give you permission. So even if a company came up with its own approach that just happened to be the same approach as what has already been established in a patent, they would be liable because they'd be using a system that was already documented in the patent system. So it's a very interesting way of protecting

your ideas. But one thing you can do if you own a patent is well, first, first of all, you can sell it if you want, So if you are the holder of a patent, you can actually sell your patents to another entity. In fact, there are other companies that that's all they do is just buy up patents.

But you can also license your patents to other parties. So, in other words, you come up with a brilliant idea on a way to design a particular style of light bulb, and a company wants to make lightbulbs using your design, so they pay you a licensing fee, and in return, you give them permission to use your patented idea. Everyone benefits. The company can sell products and make make profit. That way, you profit from being able to license your idea to

someone else. And in fact, there's some companies that's all they do is licensed patents. They don't make anything. They hold the patents for making stuff, but they don't necessarily have any manufacturing facilities. They just licensed it out to other people. They're also companies called patent trolls, and patent

trolls are a little different. Instead of licensing a patent to other companies, they wait until a company makes a product or some other system that infringes upon a patent and then they threaten to sue unless the company settles for an enormous sum of money out of court. And uh, that's what a patent troll is. That it's an entity that has no interest in putting its patents to work in any way other than as a means of leveraging power over other companies that would want to use that process.

All right, at any rate, Gerard and Anton thought it was really intelligent to develop a company specific research and development facility to help file patents so that the company itself wouldn't have to rely on licensing these third party entities in order to make stuff. The first director of the nat Lab was a man named Hiel's Host Holst was an engineer turned physicist, a doctor. Doctor Holst a former teacher. He was a professional researcher. He did early

research into superconductivity. That's where you cool down a conductive substance, you know, a metal, You cool it down to a very very a low temperatures and that will eliminate electrical resistance,

meaning you have a perfect conductor. Uh. Holst also had worked with Madame Curie in some of her experiments and radio activity, so very important person and Holst was a big thinker, and he was determined to give his researchers a huge amount of freedom to explore fundamental scientific questions, even if there were no immediately applicable outcomes to that

that that area of inquiry. So in other words, he said, it doesn't matter if the questions you are asking immediately result in some sort of product that Phillips can sell. It's important for us to answer the questions, So go out there and do that. And the result was that then Lab became an important center of research, and Phillips and Company actually benefited as a result. It's a good example of how fundamental research can result in benefits even

you didn't see the possibility when you started out. Some of that research helped in the development of infrared and X ray technology, which no one really could have been predicted at the time. Holst was also uh important because he invited individuals in the scientific field to come to

nat Lab and to give lectures. For example, a physicist of certain renown named Albert Einstein gave a talk at nat Lab in nineteen twenty three, So it really was a center of learning and research and UH and kind of a point of pride in the Netherlands as well. All right, well, let's go back to nineteen fifteen UH and the history of the company. So now we're getting into the time of World War one, UM, which of

course back then was just the Great War. So the Netherlands maintained a neutral status during World War One, and as a result, operations at Phillips remained largely disturbed. In addition, the war was creating coal shortages, and that meant that it was harder for people for companies to produce coal gas, which meant it was harder to fuel gas lamps, and it forced a lot more people to convert to using electricity. So, in other words, World War One actually generated business for

the Phillips Company. So to support the production of new lamps, Phillips invested in a couple of different properties to to really ramp up production. One of them was an argone production facility. They had a argon lamp that was efficient and inexpensive, so it was very popular. They also purchased a glass manufacturing plant in order to ramp up production on their lamps. We'll be right back with more about

the history of the Phillips company. After this break, in nineteen nineteen, Phillips introduced a medical X ray tube, which officially diversified the company from just the incandescent lamp business. Then lab was busy researching technologies and filing patents for everything from gas diffusion to radio wave reception, and the

company also began to expand to other countries. They opened up sales forces in the United States and in France, and a little bit later in Australia, Brazil and China, so they were not taking things slowly in the early part of the twentieth century. Now, the X ray business was still really new in nineteen nineteen. Phillips started in the business by repairing X ray tubes during World War One and then moved to manufacturing tubes on a small

scale in the Phillips research laboratory. But early X ray tubes had some pretty distinct disadvantages. One was that they emitted radiation in all directions, not just jumber one you happen to be interested in, which is not just inefficient, it's also dangerous. Because X ray radiation is ionizing radiation. It can potentially cause cancer if you're exposed to it, So having it emit in all directions was not safe. They also relied on high voltage cables, which were exposed

and thus potentially dangerous. You can electrocute yourself. Even if you were safe from the radiation, you could just die from the electricity. But a man known as A Bowers of the Phillips Research Laborator Laboratory came up with a solution. Bowers designed a cylindrical X ray tube. The earlier X ray tubes were actually spherical, so kind of like a lightbulb is. But the ones that Bowers made were cylindrical and had a grounded metal canister with a glass window

on one side of the canister. So imagine that you've got a cylindrical UH glass tube. You slide that into a metal canister. The metal canstor has one side cutout, so it's like a window, and then you coat the metal canister with lead and that way, when you turn on the X ray tube, X rays can only come out the window side. They can't go through the lead lined case. So you thus made it more efficient and safer because you could you could direct the path of the X rays. UH. It took a few tweaks to

get the design just right. But it was a success, and Phillips began to market it. They called it metall Licks or Metallics M E T A l I X. Now, I'm gonna take a quick break from talking about X rays for a second. I'm gonna come back to that in a minute, but I want to mention a few

things that also happened around this same time frame. First, in nineteen twenty, a company called Yeah It's happening again, all right, A company called n V Gameen shopill Lich binzit vonder Lean Phillips, Gloriamp and fabriacn formed and assumed ownership of Phillips. Boy, I sound like I've had a stroke, but the short ename for it was n Z bin Zi.

Two years later, Gerard Phillips retires as CEO, so two he steps down and Anton Phillips, his younger brother, assumes the position of chairman at age Now a nineteen seven Phillips bought a company called C. H. F. Mueller of Hamburg. So this is a German company, which is why I know how to pronounce it. C h. F. Mueller was founded by Carl Heinrich Florence Mueller in the nineteenth century

and originally was a glass company. Mule Or himself was known for being a very artistic h glassblower, and the early products from Mueller were these decorative pieces like goblets and wine glasses. But over time Mueller began to refine his process to build glass for gas diffusion and incandescent bulbs. And Mueller also had a reputation and a history that was tightly tied to X rays. So to explain that, we actually have to look back at the discovery of

X rays. So let's let's look at so in while Gerard was being rescued by his brother Anton, there was a physicist named Wilhelm Conrad laurunjin Um. He was experimenting with cathode rays and produced X rays. He was not the only scientist who had been experimenting with this. Nicola Tesla is another notable old person who who noticed the the existence of X rays, although he didn't fully appreciate

the the applications of it. But on November ront Gen discovered a screen coated with bury um platino cyanide with fluoresce when a nearby gas discharged tube activated, even when there was a black cardboard barrier separating the two and he was wondering, what, how is that happening, What's why is it fluorescing, What's causing that? So he began to explore this curious phenomenon and as a result, he identified

X rays. He noted in one experiment that if you put your hand between the discharging tube and a screen, you could see an image of your hand on the screen with your bones a darker image than your flesh. That wasn't exactly a high resolution X ray at that time, but it showed the potential for it, and not long after he published his findings, researchers at the National Physics Laboratory reproduced the effect using a cathode ray tube from C. H. F. Mueller.

The results were interesting but pretty fuzzy, and so the researchers got in direct contact with Mueller explained what it was they were trying to do, and so Mueller and the researchers together began to try and develop a better cathode ray, specifically for X ray production. So they refined

their approach. Now, by the time Phillips acquired the company of C. H. F. Mueller, they had that company had already become a leading provider of X ray technology, So now Phillips had become the name and x ray tech. Also in nineteen seven, Phillips was starting to get into the radio business. Now, I've done several episodes about the history of radio, including a discussion about who invented radio

in the first place. In fact, that was an episode Chris Palette and I recorded, and famously, after the first attempt, we both agreed that the episode we had just recorded was awful, and we immediately trashed it and went back and recorded it a second time. So if you go back into the archives of Tech stuff and you listen to the episode who Invented the Radio, it's actually our second try at that topic. The first one is lost forever because I think we deleted it. I don't think

it even exists in our archives. But as it turns out, it's a tough question to answer. It's a lot more complicated than just saying Nicola Tesla invented radio or Marconi invented radio. But no matter how complex the origins of the radio, it was incredibly popular. It's pretty easy to understand why people flocked to the radio because it was a new form of receiving communication from the world at large.

You could get news immediately from Miles and Miles aw a and it was a revolution in communication, and so Phillips became a leading manufacturer of radios in the Netherlands. In ninety two, just five years after getting into the industry, Phillips had already sold its one million radio set and also became the leading manufacturer of radios and radio tubes, not just in Europe but in the whole world. However, the following decade, the nineteen thirties, that just they weren't

all that prosperous. Uh. There was a depression in europe An economic depression, and Phillips was affected just like other companies were, and so the company had to restructure and had to lay off a lot of employees and scaled down and focus. But one thing they did not do is skimp on research and development. The company actually committed even more resources towards R and D in the hopes

of becoming more nimble to a changing market. The idea being that things were going to evolve very quickly and only through scientific inquiry would the company be able to stay ahead of the game. And around that same time, engineers in then lab had been experimenting with a new technology called television that was largely an internal project within the company until about ninety eight, which is when Phillips presented a showcase of their black and white television set

at the annual Fair in Utrecht. Phillips would remain a television manufacturer until two thousand eleven, when the company decided that the market was too competitive, and at that point Phillips shut down its TV manufacturing centers and entered a partnership with another company called TPV Technology out of Hong Kong. That agreement formed a new organization that would develop and market television's using the Phillips brand, but it was only

thirty owned by Phillips. Tv P p V would own the remaining sevent of that organization, So the Phillips television sets you see today are Phillips in name only. Really, it's a brand that exists, but it's not manufactured in a Phillips factory. In nine Phillips stuck its toe in another area of consumer electronics, the electric shaver. Their product was called the Philip Shave, which is hilarious to me. The original model had a chord, so you had to

plug it into the wall in order to operate it. Uh. It was a cylindrical device with a circular little metal surface that's what contained the rotating blades that you would use to cut the hairs on your face. And it's sort of like an electric cucumber. In the United States, the brand name for Philip's shaving devices was nore Elco. So if you've heard of NoREL COO, that's a Philip's brand, and the rest of the world it was just called

the Philips Shave until about two thousand six. That's when Phillips began to phase out the Philips shave brand name and start to market them just under Phillips. Meanwhile, here in the US, they included Phillips with Narrelko uh, probably in anticipation of dropping the nar Elco name entirely, and so you would just get Phillips brand, uh, you know, shavers all across the world and not have this this

different brand name in different countries. Nonsense going on, and as time went on, they would add other products to this line, things like beard trimmers and hair trimmers, that kind of stuff, and so they created sort of a consumer products division within Phillips beyond just lightbulbs and radio and television sets. No. Nine was also the year that Anton Phillips resigned as president, though he would remain an

advisor to the company for several more years. His son in law, Franz Aughton became president and his actual son, Fritz Phillips became a director of the company, so UH Anton's son Fritz would report to Anton's son in law Franz. Fritz and Franz was a very tumultuous year for the company. The Netherlands didn't have the luxury of remaining neutral in World War Two the way they did in World War One, and in fact, it became clear that Germany was preparing

to invade the Netherlands. So an anticipation of that upcoming invasion, Franz Autin and Anton Phillips formed the North American Phillips Corporation or in a PC in the United States, and then they began to relocate operations to America in order

to avoid the conflict. UH. On paper, the business was still listed as being a Netherlands company a Netherlands based company lee for tax purposes, but effectively management was shifting to the United States, and when Germany invaded the Netherlands, it took about five days of fighting before the Dutch government surrendered. They were pretty much forced to. They just were not equipped to resist the Nazi occupation of the Netherlands.

And so at that point Phillips management, the ones who had not already moved to the United States fled first to England, and then from England they went to the US to join the n a PC. Now this is where we're going to bring Part one to an end, and in part two we're going to talk about what happened to Anton Phillips's son, Fritz Phillips during World War Two. Because Fritz, unlike his father and his uh you know, his brother in law, he stayed in the Netherlands. He

did not move to the United States. I hope you enjoyed that classic episode. Next week we will clued this classic series two part series of I guess you can't call it this series if it's just two right, this two part next week and if you have suggestions for things I should cover in future, you know, more current

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