Decoder with Nilay Patel
How Philips CEO Roy Jakobs is turning the company around after major recall
Mon, 16 Sep 2024
Today, I’m talking with Roy Jakobs. He’s the CEO of Royal Philips, which makes medical devices ranging from MRI machines to ventilators. Philips has a long history —- the company began in the late 19th century as a lightbulb manufacturer, and over the past century it’s grown and shrunk in various ways. Basically, while every other company has been trying to get bigger, Philips has been paring itself down to a tight focus on healthcare, and Roy and I talked about why that market is worth the focus. Roy and I also talked about an ongoing controversy at Philips that he had a part in: In 2021, after years of consumer complaints, Philips was made to recall millions of its breathing machines. Those devices were eventually tied to more than 500 deaths. That’s a pretty big decision, with massive life-or-death consequences, and you’ll hear us talk about it in detail. Links: Problems reported with recalled Philips ventilators, BiPAP & CPAP machines | FDA FDA says 561 deaths tied to recalled Philips sleep apnea machines | CBS News Philips kept complaints about dangerous breathing machines secret | ProPublica Top Philips executive approved sale of defective breathing machines | ProPublica Philips reaches final pact with DOJ, FDA on ventilator recall | WSJ Philips suspends U.S. sales of breathing machines after recall | NYT CPAP maker reaches $479 million settlement on breathing device defects | NYT Philips exits shrinking home entertainment business | Reuters Original TSMC investor Philips sells off final shares | PC World Philips unveils new AI-powered cardiovascular ultrasound | Mass Device Transcript: https://www.theverge.com/e/24006874 Credits: Decoder is a production of The Verge and part of the Vox Media Podcast Network. Our producers are Kate Cox and Nick Statt. Our editor is Callie Wright. Our supervising producer is Liam James. The Decoder music is by Breakmaster Cylinder. Learn more about your ad choices. Visit podcastchoices.com/adchoices
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Hello and welcome to Decoder. I'm Neil I. Patel, editor-in-chief of The Verge, and Decoder is my show about big ideas and other problems. Today I'm talking with Roy Jacobs, the CEO of Royal Philips, which makes medical devices ranging from MRI machines to ventilators. Philips has a long history. Their company began in the late 19th century as a light bulb manufacturer.
And over the past century and change, it's grown and shrunk in various ways. That famous light bulb business? Yeah, it was spun out into a separate company called Signify in 2018, which now makes and sells Philips-branded light bulbs like the popular Hue line.
There's an incredible history of this sort of thing at Philips, which has had a hand in basically every part of the electronics business you can think of. This is the company that invented the cassette tape. It helped to invent the CD with Sony. It's made everything from radios to generators to electric shavers. It was even a founding investor in TSMC, which now dominates chip manufacturing.
But it sold that stake in 2008, while also spinning off its own semiconductor business into what is now the very successful NXP. Basically, while every other company has been trying to get bigger, Royal Philips has been paring itself down to a tight focus on healthcare.
Roy and I talked about that and why that market is worth the focus and whether European companies have a different attitude towards size than American firms. And of course, we talked about AI. Philips makes complex diagnostic tools like those MRI machines and ultrasound systems. And there's a lot of interest in adding AI to these tools to help find medical issues earlier than ever.
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