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<SEC-DOCUMENT>0001156973-06-001168.txt : 20080305
<SEC-HEADER>0001156973-06-001168.hdr.sgml : 20080305
<ACCEPTANCE-DATETIME>20061020112959
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001156973-06-001168
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20061020

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KONINKLIJKE PHILIPS ELECTRONICS NV
		CENTRAL INDEX KEY:			0000313216
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (NO COMPUTER EQUIP) [3600]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			P7
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		BREITNER CENTER
		STREET 2:		AMSTELPLEIN 2
		CITY:			AMSTERDAM
		STATE:			P7
		ZIP:			1096 BC
		BUSINESS PHONE:		31 20 59 77777

	MAIL ADDRESS:	
		STREET 1:		BREITNER CENTER
		STREET 2:		AMSTELPLEIN 2
		CITY:			AMSTERDAM
		STATE:			P7
		ZIP:			1096 BC

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PHILIPS ELECTRONICS N V
		DATE OF NAME CHANGE:	19930727

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PHILIPS NV
		DATE OF NAME CHANGE:	19910903
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>corresp</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Page </B>1 of 8
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>PHILIPS HAS CLAIMED CONFIDENTIAL TREATMENT OF PORTIONS OF THIS<BR>LETTER IN ACCORDANCE WITH 17
C.F.R. &#167; 200.83</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">October&nbsp;19, 2006
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Cecilia D. Blye<BR>
Chief<BR>
Office of Global Security Risk<BR>
Securities and Exchange Commission<BR>
100 F Street, N.E<BR>
Washington, D.C. 20549

</DIV>

<DIV style="margin-top: 16pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" nowrap align="left">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD>Re: Koninklijke Philips Electronics N.V. &#151; Form&nbsp;20-F for the Fiscal
Year Ended December&nbsp;31, 2005 (File No.&nbsp;001-05146-01)</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 16pt">Dear Ms.&nbsp;Blye:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Thank you for your letter dated March&nbsp;21, 2006 setting forth requests for supplemental information
relating to the Form 20-F for the fiscal year ended December&nbsp;31, 2005 (the &#147;2005 Form&nbsp;20-F&#148;) of
Koninklijke Philips Electronics N.V. (&#147;Philips&#148; or the &#147;Company&#148;) filed with the Commission on
February&nbsp;13, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Philips&#146; responses to your requested information are set forth below. To facilitate your review, we
have included in this letter the captions and numbered comments from your comment letter in
italicized text, and have provided Philips&#146; responses immediately following each numbered comment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company acknowledges that (i)&nbsp;the Company is responsible for the adequacy and accuracy of the
disclosure in the filing, (ii)&nbsp;Staff comments or changes to disclosure in response to Staff
comments in the Reports reviewed by the Staff do not foreclose the Commission from taking any
action with respect to the filing, and (iii)&nbsp;the Company may not assert Staff comments as a defense
in any proceeding initiated by the Commission or any person under the federal securities laws of
the United States.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Page</B> 2 of 8
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Form&nbsp;20-F for the year ended December&nbsp;31, 2005</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>1.&nbsp;We note from public media sources and your website that you may have existing or anticipated
operations associated with Cuba, Iran and Syria. We note a March&nbsp;15, 2003 interview with Gerard
Kleisterlee in which he states that several Middle East countries have increasing interest to
the company, with Iran being one of the named countries. Your </I><I>Form 20-F</I><I> includes no disclosure
regarding operations in any of these countries. Please describe your current, historical and
anticipated operations in, and contacts with, Cuba, Iran and Syria, including through
subsidiaries, affiliates, joint ventures and other direct and indirect arrangements.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Response:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During the three-year period goods and services have been supplied to companies in Cuba, Iran
and Syria. Medical equipment has also been supplied to governmental hospitals in Cuba and Syria.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Sales through consolidated companies</B></U><BR>
Except as described below for Iran, none of our businesses have operations in Cuba, Iran or
Syria in terms of investments in those countries, corporations or other entities organized under
the laws of those countries, or offices in those countries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Four of our five product divisions &#151; Consumer Electronics, Domestic Appliances and Personal
Care, Medical Systems and Lighting &#151; derived revenues from sales of products and services in
Cuba, Syria and Iran during the years 2003, 2004 and 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Two other business units that are reported as part of our Other Activities sold products in one
of these countries. Assembl&#233;on derived revenues from sales of products in Iran in 2004 and 2005,
and Philips Business Communications (PBC)&nbsp;derived revenues from sales of products in Cuba in
2005 by a third party.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our Semiconductors product division did not sell any products or services in or into, or derive
revenues from, Cuba, Iran and Syria during the years 2003, 2004 and 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, since 2004 Philips Medical Systems has supplied medical equipment into Venezuela
which has been purchased through Cimex Corporacion (&#147;Cimex&#148;) &#151; a Cuban governmental purchasing
organization &#151; as part of a health care improvement project of the Venezuela government. In
connection with this project, which is primarily managed through Cuban assistance to the
Ministry of Health in Venezuela, Philips delivers medical equipment to Venezuelan hospitals and
receives payment from Cimex. Philips understands that the government of Venezuela in turn,
compensates Cuba. Our sales to this Venezuelan health care program
were [&#149;].
[CONFIDENTIAL INFORMATION IN THE PRECEDING SENTENCE HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
As the Venezuelean government is the party to which this medical equipment
is delivered by Philips, the financial results and other information presented in this response
letter exclude sales through this program unless specifically indicated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Unless otherwise indicated, the financial data contained in this response letter under this
caption relates to entities that Philips consolidated in its results as of 31 December&nbsp;2005.<BR>
In addition, Philips has requested information from all of the joint ventures and other entities
in which it held a 20% or greater equity interest and which it accounted for on the equity
method of accounting (&#147;equity accounted affiliates&#148;) at 31 December&nbsp;2005, and included any
relevant information received in this response letter.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Page </B>3 of 8
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Sales through consolidated companies in Euros</B></U><BR>
(Figures have all been rounded up to the next full million)
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>[CONFIDENTIAL INFORMATION IN THE FOLLOWING TABLE HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]</B></U><BR>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">In Million <B>Euro</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cuba</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Iran</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Syria</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Sales through consolidated companies in US $</B></U><BR>
(Figures have all been rounded up to the next full million)
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>[CONFIDENTIAL INFORMATION IN THE FOLLOWING TABLE HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]</B></U><BR>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">In Million <B>US$</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">(1$=0.8854<FONT face="'Times New Roman',times,serif">&#128;</FONT>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">(1$= 0.8050<FONT face="'Times New Roman',times,serif">&#128;</FONT>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">(1$= 0.8053<FONT face="'Times New Roman',times,serif">&#128;</FONT>)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left">Cuba</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left">Iran</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left">Syria</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The total revenues derived from Philips&#146; operations in Cuba, Iran and Syria as shown in the
above tables represented in each year approximately one-tenth of one percent of Philips&#146;
consolidated sales for 2003, 2004 and 2005.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Page </B>4 of 8
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Products and services to Cuba, Iran and Syria:</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#091;CONFIDENTIAL INFORMATION IN THE FOLLOWING TABLE HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION&#093;</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="14%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Product Division or</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Business Unit</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Sales in Million US$</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Key Products</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Key end markets</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Medical Systems
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Medical equipment, e.g.
Defibrillators, MR-scanners,
Ultrasound, monitors, etc.; spare
parts for the medical equipment
delivered
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Hospitals &#038; Doctors</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Lighting
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lamps, indoor fluorescent lamps,<BR>
automotive lamps, downlights,<BR>
lighting components &#038; materials
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Households &#038; professional<BR>
lighting appliances</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Consumer <BR>
Electronics
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consumer equipment, e.g. color
TVs, hotel TVs, DVD players,
CD-audio equipment
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Households &#038; Hotels</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Domestic <BR>
Appliances &#038;<BR>
Personal Care
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Domestic appliances, e.g. Irons,
Blenders, citrus presses
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Households &#038; Hotels</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Assembl&#233;on
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Surface-mount placement equipment
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Industry</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Business <BR>
Communications
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">PBX business telephone system
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Business</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Revenue distribution over the Product Divisions and Business Units during the 3&nbsp;year
period 2003-2005:</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>&#091;CONFIDENTIAL INFORMATION IN THE FOLLOWING TABLE HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION&#093;</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Domestic Appliances</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Business</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Medical Systems</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Lighting</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Consumer Electronics</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">and Personal Care</TD>
    <TD>&nbsp;</TD>
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    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Assembl&#233;on</TD>
    <TD>&nbsp;</TD>
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    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Communications</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
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<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cuba</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
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</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Iran</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
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</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Syria</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
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</TR>
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</TABLE>
</DIV>
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Page </B>5 of 8
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Sales through unconsolidated companies</B></U><BR>
In addition to the information on consolidated operations set forth above, Philips has requested
information relating to all of the joint ventures and other entities that were equity accounted
affiliates at 31 December&nbsp;2005. The results are as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Philips had 40 equity accounted affiliates at 31 December&nbsp;2005. As of October&nbsp;4, 2006, Philips
had received responses in respect to 39 of those entities, of which three equity accounted
affiliates have business in one or more of the countries (see below). With respect to one of
these entities we do not expect to obtain information as they are no longer affiliated with the
Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, Philips had 22 equity accounted affiliates that were at least for a part of the
period 2003-2005 equity accounted affiliates by Philips but were no longer so accounted by the
end of 2005. As of October&nbsp;4, 2006, responses had been received with respect to 17 of those
entities (none of them reported business in the three countries). With respect to five of these
entities we do not expect to obtain information as they are no longer affiliated with the
Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The only equity accounted affiliates so far identified with business in Cuba, Iran or Syria sold<BR>
(1)&nbsp;picture tubes into Iran (sales: [&#149;]; (2)&nbsp;lighting fluorescence tubes into Cuba (sales: [&#149;]), and into the United Arab Emirates, to a customer with distribution channels into Iran
(sales to the UAE: [&#149;]); and (3)&nbsp;filaments into Iran
(sales: [&#149;]). <U><B>[CONFIDENTIAL INFORMATION IN THE PRECEDING SENTENCE HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Equity interests in companies in Cuba, Iran and Syria</B><BR>
Philips has no investments in Cuba and Syria. Philips has agreements with unrelated local
parties about distribution and sales in Iran and Syria. In Cuba there are no local distributors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Philips has no interest in companies in Cuba and Syria, and only the following in Iran:
(1)&nbsp;ownership of 100% of the shares of &#147;Philips Iran&#148;, a private joint stock company originally
established in 1956, with a nominal value of approximately US$ 4,600 (40,000&nbsp;million Iranian
Rials), and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(2)&nbsp;ownership of 2.3% of Sherkate Towlidi Lampe Tasvire Iran, a joint venture originally
established in 1970 that has been dormant since 1996, with a nominal value of approximately US$
13,300 (115,415&nbsp;million Iranian Rials).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There are no Philips employees or entities located in Syria and Cuba.<BR>
Philips has no production facilities in Cuba, Iran or Syria.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Explanation relating to Iranian assets:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The local country organization &#147;Philips Iran&#148; has four staff members on its payroll, and
operates Philips&#146; representative office in Iran. This office is managed through Philips Middle
East in Dubai, and is wholly owned by Philips. The office is not a trading office but maintained
for legal representation. All business activities are conducted on export/import basis, managed
by the product divisions out of the United Arab Emirates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The carrying financial value of Philips Iran in the accounts of Philips is -12,124 Euro
(negative).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The responsibilities of Philips Iran are:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Representing Philips in Iran in contacts with governmental authorities, local
institutions, academic establishments, and media.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reporting on business outlook, opportunities, risks, trends and general information
relevant to the potential for business in Iran.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Providing assistance on Philips matters to local Agents/Distributors.</TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Page </B>6 of 8
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Providing information as to changes in the Iranian laws and regulations regarding
imports of Philips related products.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Maintaining contacts with government authorities and industry leaders with the
objective of identifying business opportunities for Philips.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As noted above Philips had a joint venture, Sherkate Towlidi Lampe Tasvire, which has been
dormant since 1996.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This company is a private company. The nominal share capital is Rls. 5,000,000,000
(approximately $ 580,000). An individual ([&#149;]) owns
approximately 70% of this company.
<U><B>[CONFIDENTIAL INFORMATION IN THE PRECEDING SENTENCE HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]</B></U> We
do not control this company. The company has currently no value in the accounts of Philips.
To the best of our knowledge the following information is correct:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The assets of the company at 31 December&nbsp;2005 were about Iranian Rials 1,700,000,000
(approximately $ 200,000). The accumulated losses of the company are higher than the capital of
the company. Until 1994, the joint venture produced 21&#148; color-TV sets solely for the Iranian
market and had machinery and lines of production for picture tubes. Since 1994, it has not had
any production and it has incurred a loss annually.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Due to the dormant nature of the joint venture, we believe that this venture does not present
and will not present any risk with respect to global security. In light of the operations
conducted while active, we also believe that it did not in the past present such risk.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Future business:<BR>
We expect that the business volume in Iran and Syria will remain in the same order of magnitude
during 2006 and 2007 as it was in the years 2003, 2004 and 2005. This could change because of a
number of factors beyond our control, such as any actions taken by governments or international
bodies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The volume of sales in Cuba in the future may increase if current prospects are realized in the
field of energy saving lamps, and medical equipment for hospitals. This is based on the energy
saving project of the Cuban government, and extrapolation of the sales of medical equipment
during the past two years. However, we do not expect that sales into Cuba will exceed 0.2% of
our total consolidated revenues during the next 2&nbsp;years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There may be an additional project of medical deliveries to the Venezuelan Ministry of Health in
connection with the program mentioned above through a contractual agreement in which the Cuban
Cimex organization is a contract partner. We consider these to be supplies to Venezuela and
accordingly they are not included in the figures presented above. It is expected that this order
may generate sales of around [&#149;]. <B>&#091;CONFIDENTIAL INFORMATION IN THE
PRECEDING SENTENCE HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION&#093;</B>
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Page </B>7 of 8
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>2.&nbsp;In light of the fact that Cuba, Iran and Syria are identified as state sponsors of terrorism
by the U.S. State Department and subject to economic sanctions and controls administered by the
U.S. Treasury Department&#146;s Office of Foreign Assets Control and the U.S. Commerce Department&#146;s
Bureau of Industry and Security, please address the materiality of any operations or contacts
described in response to comment one above. Also, please present your view as to whether any
such arrangements or other contacts constitute a material investment risk for your security
holders.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Response:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Please see our response to Comment 1 for a quantitative analysis of our historical operations,
including assets in and revenues derived from Cuba, Iran and Syria. As noted in our response to
Comment 1, our revenues from sales in those countries represent in aggregate approximately
one-tenth of one percent of Philips&#146; consolidated sales and virtually none of its consolidated
net assets. We do not believe that these operations constitute a material investment risk for
Philips shareholders because of their small size and the nature of the products and services
sold.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>3.&nbsp;In preparing your response please address materiality in quantitative terms, including the
approximate dollar amount of revenues and assets associated with Cuba, Iran and Syria. Your
response should also include consideration of qualitative factors that a reasonable investor
would deem important in making an investment decision, including the potential impact of
corporate activities upon a company&#146;s reputation and share value as a result of operating in
countries identified as state sponsors of terrorism. We note that Arizona and Louisiana have
adopted legislation requiring their state retirement systems to prepare reports regarding state
pension fund assets invested in and/or permitting divestment of state pension fund assets from
companies that do business with U.S.-designated state sponsors of terrorism. Florida requires
issuers to disclose in their prospectuses any business contacts with Cuba or persons located in
Cuba. Your qualitative analysis should address the potential impact of the investor sentiment
evidenced by these actions directed toward companies operating in Cuba, Iran and Syria.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Response:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As noted in our response to Comment 1, our revenues from sales in those countries represent in
aggregate approximately one-tenth of one percent of Philips&#146; consolidated sales and virtually
none of its consolidated net assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Philips has assessed the potential effects of its contacts with Cuba, Iran, and Syria based on
qualitative factors as well as quantitative factors, including the potential impact upon the
reputation of, and investor interest in Philips. Even where U.S. export or reexport licenses to
these countries are required due to U.S.-origin product content, U.S. policies and regulations
that govern the export of medicines and medical supplies and equipment either by sale or
donation provide that licenses will ordinarily be granted for the export and reexport of
medical devices to Cuba and Iran (e.g. the Ag/Med program promulgated in response to the Trade
Sanctions Reform and Export Enhancement Act of 2000). Thus, given U.S. Government
policy to approve such sales, the export of medical devices by a non-US company should not carry
the reputational risk that exports of other products, such as dual use items or other products
that are barred by either the OFAC sanctions or the EAR, would carry. As demonstrated above,
such medical products formed the majority of Philips exports to these countries.
</DIV>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Page </B>8 of 8
</DIV>


<DIV style="margin-top: 16pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>With respect to the adoption by certain States of sanctions and similar provisions, we believe
that those actions have been pre-empted by the comprehensive federal sanctions legislation and
regulations (See the U.S. Supreme Court&#146;s decision in <U>Crosby v. National Foreign Trade
Council</U>, 530 U.S. 363 (2000)). We do not believe that such attempts by certain States to
enter the foreign policy arena are likely to constitute a material investment risk for our
security holders.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Philips operates a uniform and company-wide system on export controls. Philips seeks and
obtained US export licenses to these countries related to supply of health and medical
equipment when required. The application of export controls and sanctions to our multinational
operations is quite complex, and though we strive for full compliance, sometimes errors are
made.<U><B>
[CONFIDENTIAL INFORMATION IN THIS PARAGRAPH HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]</B></U></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On the basis of the foregoing, and on the fact that the total sales to customers in Cuba, Iran and
Syria in the years 2003, 2004 and 2005 amounted to only 0.1 % of the total consolidated sales of
the Company in each year, we do not believe that these activities pose any material risks to
Philips or to investors in Philips securities and we believe that they should not affect our
reputation or our share price or otherwise be material to a shareholder in assessing, as part of
the overall mix of information, an investment in Philips.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In light of the foregoing we do not believe that under the circumstances any additional information
regarding the Company&#146;s businesses in Cuba, Iran and Syria would be significant to investors.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">*****
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Please direct any questions or comments regarding the enclosed material to the undersigned at (011)
(31)&nbsp;20 59 77 241. Our fax number is (011) (31)&nbsp;20 59 77 150. We are available to discuss any of
the foregoing with you at your convenience.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 55%; margin-top: 16pt">Very truly yours,
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 55%; margin-top: 26pt">_________________<BR>
<BR>
E.P. Coutinho<BR>
General Secretary and Chief Legal Officer
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">cc:&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>James Lopez<BR>
(Securities and Exchange Commission)<BR>
Gerard Ruizendaal<BR>
Wolter Boerman<BR>
Albert Verdam<BR>
(Koninklijke Philips Electronics N.V.)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Andrew D. Soussloff<BR>
John O&#146;Connor<BR>
(Sullivan &#038; Cromwell LLP)</TD>
</TR>

</TABLE>
</DIV>


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