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<SEC-DOCUMENT>0000950123-10-042488.txt : 20100816
<SEC-HEADER>0000950123-10-042488.hdr.sgml : 20100816
<ACCEPTANCE-DATETIME>20100503120733
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950123-10-042488
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20100503

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
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Ms.&nbsp;Kate Tillan<BR>
Assistant Chief Accountant<BR>
Division of Corporation Finance<BR>
Securities and Exchange Commission<BR>
100 F Street, N.E<BR>
Washington, D.C. 20549<BR>
U.S.A.

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Amsterdam, May&nbsp;3, 2010&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</DIV>


<DIV align="left" style="margin-top: 12pt">
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<TR>
    <TD width="3%"></TD>
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    <TD></TD>
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<TR valign="top">
    <TD nowrap align="left"></TD>
    <TD>&nbsp;</TD>
    <TD>Re: <u>Koninklijke Philips Electronics N.V. &#151; Form&nbsp;20-F for the Fiscal Year ended
December&nbsp;31, 2009 (File No.&nbsp;001-05146-01)</u></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Ms Tillan,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thank you for your letter dated April&nbsp;1, 2010 setting forth comments regarding the Form 20-F
for the fiscal year ended December&nbsp;31, 2009 (the &#147;2009 Form&nbsp;20-F&#148;) of Koninklijke Philips
Electronics N.V. (&#147;Philips&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To facilitate your consideration of Philips&#146; responses, we have included below the comments
and have provided Philips&#146; responses immediately following.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Philips acknowledges that (i)&nbsp;Philips 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 do not foreclose the Commission from taking any action with respect to the filing, and
(iii)&nbsp;Philips 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>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In certain of our responses, we have proposed to amend the wording of certain disclosures in
our future filings. We are doing that to respond to the comments and not because we believe our
prior filings are materially deficient or inaccurate. Accordingly, any changes in subsequent
filings should not be viewed as an admission that prior disclosures were in any way deficient.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Form&nbsp;20-F for the Fiscal Year ended December&nbsp;31, 2009
</DIV>




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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Item&nbsp;10. Additional Information, page 78</I></U>
</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"><I>1.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note that you have incorporated by reference your Articles of Association. However, in
future filings, please provide a description and summary of the information required by
Item10.B. of </I><I>Form 20-F</I><I>.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Response:</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In response to the comment we will in future filings include the specified information where
applicable to Philips under Item&nbsp;10.B. either by including the disclosure directly in 10.B. or by
appropriate cross reference to where the information may be found. Some of this information is
already contained in our Corporate Governance section on page 143 of our Annual Report which is an
exhibit to the 20-F.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><I>Item&nbsp;12. Description of Securities other than Equity Securities, page 80</I></U>
</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"><I>2.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>In future filings, please provide the information required by Item&nbsp;12 of </I><I>Form 20-F</I><I>. Please
see Instruction 1 to Item&nbsp;12 of </I><I>Form 20-F</I><I>.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Response:</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We believe that the disclosure with respect to our New York Share Registry program contained on
page 80 is responsive to the requirements of Item&nbsp;12 applicable to our Annual Report; however, in
preparing future filings, we will review our existing disclosure in light of changed facts and
circumstances and/or evolving practices among foreign private issuers with respect to the
disclosure requirements of Item&nbsp;12.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Item&nbsp;16G. Corporate Governance, page 83</I></U>
</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"><I>3.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>In future filings, please provide a concise summary of any significant ways in which your
corporate governance practices differ from those followed by domestic companies under the
listing standards of the NYSE.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Response:</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We will in future filings provide a concise summary of any such significant differences.
</DIV>








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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Philips Annual Report, Exhibit&nbsp;15(B)</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><I>Group Financial Statements, page 155</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><I>Consolidated Statements of Income, page 155</I></U>
</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"><I>4.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Since you classified expenses by function in your consolidated statements of income, please
explain to us how you considered the additional disclosures required under paragraphs 104 &#151;
105 of IAS 1.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Response:</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">IAS 1 paragraph 104 indicates that an entity classifying expenses by function shall disclose
additional information on the nature of expenses, including depreciation and amortization expense
and employee benefits expense.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">IAS 1 paragraph 105 illustrates the importance of providing additional disclosure regarding the
nature of expenses in that situation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We believe our disclosure is consistent with the requirements of <I>paragraphs104 &#151; 105 of IAS 1.</I>
Note 3 &#145;Income from operations&#146; provides disclosure of the nature of expenses such as depreciation
and amortization and employee benefits (salaries and wages). Notes 18, 30 and 31 further explain
the underlying nature of the main employee benefits (pensions, share-based compensation and board
remuneration).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Consolidated Statements of Cash Flows, page 160</I></U>
</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"><I>5.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>You reconcile net income or loss attributable to stockholders to net cash provided by
operating activities instead of using net income or loss. Please tell us why you believe this
presentation is appropriate under paragraphs </I><I>18(b)</I><I> and 20 of IAS 7 which requires you to
reconcile to profit or loss.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Response:</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Although we believe that the components of our Net income (loss)&nbsp;are clearly presented in the
Consolidated statements of cash flows, in response to the comment, we will reconcile Net income
(loss)&nbsp;to Net cash provided by operating activities in future filings.
</DIV>




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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Note 11.11 Significant Accounting Policies, page 166</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><I>Revenue Recognition, page 167</I></U>
</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"><I>6.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>Please explain to us in greater detail how you record revenue for product sales for which you
grant a residual value guarantee or that have a buy-back feature. In this regard, discuss how
you apply IAS 17 to these transactions and discuss the nature of the arrangements, any
embedded derivatives and the accounting for any losses under the agreements. In future
filings, please revise your disclosure so that instead of just citing an accounting standard,
you explain how you apply the provisions of the standard to your transactions.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Response:</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For products for which a residual value guarantee has been granted or that have a buy-back feature,
revenue recognition takes place when significant risks and rewards of ownership are transferred to
the customer. The following are the principal factors that the Company considers in determining
that the Company has transferred significant risks and rewards:
</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="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The period from sale to the repurchase represents the major (normally at least 75%)
part of the economic life of the asset;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The difference between the proceeds received on the initial transfer and the amount of
any residual value guarantee or repurchase price, measured on a present value basis,
amounts to substantially all (normally at least 90%) of the fair value of the asset at the
sale date;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Insurance risk is borne by the customer; however, if the customer bears the insurance
risk but we bear the remaining risks, then risks and rewards have not been transferred to
the customer ; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The repurchase price is equal to the market value at the time of the buy-back</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In case of a loss under a sales agreement, the loss is recognized immediately.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We propose to include the substance of the above response as a significant accounting policy in
future filings.
</DIV>







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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Leases, page 168</I></U>
</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"><I>7.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>You disclose that &#147;Leases in which a </I><U><I>significant portion</I></U><I> of the risks and rewards of
ownership are retained by the lessor are classified as operating leases.&#148; We note that you
classify a lease as a finance lease when you have </I><U><I>substantially all the risk and rewards
of ownership</I></U><I>. Please compare and contrast the criteria you use to classify an operating
lease with that used to classify a finance lease. Finally please also clarify how you
considered the definitions in paragraph 4 of IAS 17and paragraph 8 of IAS 17.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Response:</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In accordance with paragraphs 4 and 8 of IAS 17, we classify a lease as a finance lease if we
retain substantially all of the risks and rewards of ownership. We, otherwise, classify a lease as
an operating lease. There has been some inconsistency in the terminology used in the various
disclosures. However, we have consistently applied IAS 17. To avoid any confusion, we will replace
&#147;a significant portion of&#148; with &#147;substantially all&#148; in future filings.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Receivables, page 168</I></U>
</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"><I>8.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note you derecognize sold and factored receivables when the Company has given up control
or continuing involvement. Explain to us how you determine the company has given up control or
continuing involvement. Also explain to us how you account for any rights retained or
obligations assumed in the transfer. Refer to paragraphs 17 &#151; 20 of IAS 39, including
paragraph </I><I>20(c)</I><I> thereof.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Response:</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company derecognizes receivables in case of sale and factoring when:
</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="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company has transferred its rights to receive cash flows from the receivables or
has assumed an obligation to pay the received cash flows in full without material delay to
a third party under a &#145;pass-through&#146; arrangement; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>either (a)&nbsp;the Company has transferred substantially all of the risks and rewards of
the ownership of the receivables, or (b)&nbsp;the Company has neither transferred nor retained
substantially all of the risks and rewards, but has transferred control of the assets.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">However, in case the Company neither transfers nor retains substantially all the risks and rewards
of ownership of the receivables nor transfers control of the receivables, the receivable is
recognized to the extent of the Company&#146;s continuing involvement in the assets. In which case, the
Company also recognizes an associated liability. The transferred receivable and associated
liability are measured on a basis that reflects the rights and obligations that the Company has
retained.
</DIV>



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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We propose to include the substance of the above response as a significant accounting policy in
future filings.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>18 Pensions and other post retirement benefits, page 189</I></U>
</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"><I>9.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note herein and in the management discussion and analysis that there were curtailment
gains totaling EUR 134&nbsp;million in retiree medical plans in 2009. However, we did not note any
explanation regarding the reasons for the curtailment gain. In order to help the readers of
your financial statements, please expand your disclosure in MD&#038;A in future filings to disclose
the underlying reasons for the curtailment gain and provide us with your proposed disclosure.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Response:</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following text will be included in the MD&#038;A in future filings that refer to the curtailment
gain of EUR 134&nbsp;million:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;In 2009, curtailment gains totaling EUR 134&nbsp;million, relating to changes in retiree medical plans,
positively impacted the result. These curtailment gains are the result of changes in the benefit
level and the scope of eligible participants of a retiree medical plan, which became effective and
irreversible in 2009&#148;.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>30 Share-based compensation, page 198</I></U>
</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"><I>10.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We note that you issued personnel debentures with a 2-year right of conversion into common
shares of Royal Philips Electronics starting three years after the date of issuance with a
conversion price equal to the share price on that date. Please tell us about the significant
terms of these debentures and how you are accounting for them and why. Cite the accounting
literature you relied upon and how you applied that literature.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Response:</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Until December&nbsp;2008, employees in the Netherlands had the option to deposit part of their salary
with Philips. After a period of three years following deposit, a participating employee may in the
next 2&nbsp;years convert the debenture (at a predetermined fixed price) into common shares of Royal
Philips Electronics.
</DIV>



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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The significant terms and conditions of the personnel debentures are as follows:
</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="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The conversion price is equal to the opening share price the day after the issuance of
the debenture;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>There is a three-year holding period (not service period), followed by a two-year
conversion period; participants retain the right to convert, even after they leave the
Company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>At any time, employees can exit the plan with a refund of their deposit;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The deposits earn below-market interest; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>No dividend is paid prior to conversion.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The accounting treatment of the personnel debentures is&#091;/was&#093; as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The convertible debentures have a fair value at the time of issuance. The fair value at grant-date
is calculated using the Black-Scholes option-pricing model, adjusted for the Company savings as a
result of the below market interest paid on the deposits. This fair value of the conversion option
is recorded as compensation expense (amounting to EUR 1.4&nbsp;million in 2009, offset in additional
paid-in capital) over the holding period of three years on a straight-line basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The measurement of the compensation expense is in line with the requirements of IFRS 2. However,
the expense should have been recognized immediately because there is&#091;/was&#093; no service requirement.
The impact on the income statement would have been less than EUR 3&nbsp;million annually in the last
five years. As the plan ended in 2008, the remaining income statement impact is less than 1
million.
</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 this letter to me at (011) (31)&nbsp;20 59 77 142. Our
fax number is (011) (31)&nbsp;20 59 77 140. We are available to discuss any of the foregoing with you
at your convenience, and thank you again for your consideration of our response to the comments of
the Staff.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Very truly yours,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pierre-Jean Sivignon<BR>
Executive Vice President and Chief Financial Officer

</DIV>

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

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Copyholders SEC letter P.J. Sivignon to Ms.&nbsp;K. Tillan &#151; May&nbsp;3, 2010
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 4%; margin-top: 6pt">Andri Boerman<BR>
Alicia Lam<BR>
Dan Morris<BR>
(Securities and Exchange Commission)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 4%; margin-top: 6pt">Jan van Leeuwen<BR>
Eric P. Coutinho<BR>
Hessel Hilarides<BR>
Marnix van Ginneken<BR>
(Koninklijke Philips Electronics N.V.)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 4%; margin-top: 6pt">John O&#146;Connor<BR>
(Sullivan &#038; Cromwell LLP)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 4%; margin-top: 6pt">Michiel Soeting<BR>
(KPMG Accountants NV)
</DIV>



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



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