By Matthew Henry

BEIJING, CHINA: Royal Philips Electronics will bow out of the global mobile phone market and sell its mobile phone business to China Electronics Corporation (CEC), the company announced over the weekend.

Philips has signed a letter of intent to transfer its remaining mobile phone activities to CEC, and will give the Chinese manufacturer a global license to market and sell phones under the Philips brand for the coming five years.

The transaction is expected to be completed before the end of the year.

According to Philips, its mobile phone business currently generates an annual turnover of EUR 400 million and employs 240 people, mainly in Asia Pacific and Eastern Europe.

A Philips Electronics Australia spokesperson told this morning that the move will not affect local consumers or retailers as Philips has not participated in the Australian mobile phone market for over three years ago.