Philips Celebrates 25th Anniversary Of The Compact Disc

August 29, 2007

Exactly 25 years ago, on August 17, 1982, Royal Philips Electronics (NYSE:PHG, AEX:PHI) manufactured the world’s first compact disc at a Philips factory in Langenhagen, just outside of Hanover, Germany. The invention of the CD ushered in a technological revolution in the music industry as CDs – with their superior sound quality and scratch free durability – marked the beginning of the shift from analog to digital music technology. The CD became a catalyst for further innovation in digital entertainment, helping pave the way for the launch of DVD and the current introduction of Blu-ray optical media. The Philips factory in Germany, where the world’s first CD was pressed, belonged to Polygram – the recording company owned by Philips at the time. The first CD to be manufactured at the plant was “The Visitors” by ABBA. By the time CDs were introduced on the market in November 1982, a catalog of around 150 titles – mainly classical music – had been produced. The first CDs and CD players – including Philips’ CD100 – were introduced in Japan in November, followed by a US and European market introduction in March of 1983. Philips and Sony partnered to develop the CD – collaboration based on open innovation helped position the CD as standard for the music industry As early as 1979, Philips and Sony set up a joint task force of engineers to design the new digital audio disc. Many decisions were made in the year to follow, such as the disc diameter. The original target storage capacity for a CD was one hour of audio content, and a disc diameter of 115 mm was sufficient for this. However, both parties extended the capacity to 74 minutes to accommodate a complete performance of Beethoven’s 9th Symphony. In June 1980, the new standard was proposed by Philips and Sony as the “Red Book,” containing all the technical specification for all CD and CD-Rom standards. Piet Kramer, who at the time was a member of the optical group at Philips that made a significant contribution to the CD technology, commented on Philips’ and Sony’s collaborative work: “When Philips teamed up with Sony to develop the CD, our first target was to win over the world for the CD. We did this by collaborating openly to agree on a new standard. For Philips, this open innovation was a new approach – and it paid off. In the late 70s and early 80s, we never imagined that one day the computing and entertainment industries would also opt for the digital CD for storing the growing volume of data for computer programs and movies.” In 1985, Philips and Dire Straits team up to promote the Compact Disc As music industry sales of CDs started to take off in 1983, more than 1,000 different titles were on the market. In 1985, one of the most famous bands in the world, Dire Straits, adopted the CD. The infamous album “Brothers in Arms,” one of the first fully-digital recordings (DDD) to be brought to market, went on to become the top selling CD at the time and the third greatest selling CD of the decade. The joint collaboration with Philips entailed Philips and Dire Straits jointly promoting the sound quality of the CD to consumers. “Brothers in Arms” became the first album to sell more than one million copies in this new format, marking the success of the CD as the emerging format of choice for music quality. “The Compact Disc has proven its significance in bringing the highest quality of music to consumers who wish to enjoy scratch free music. The enormous success of the CD during the past twenty-five years has opened many new opportunities for consumers to make the most of their music at home and on the move,” said Lucas Covers, Senior Vice President & Chief Marketing Officer, Philips Consumer Electronics. “It has played a pivotal role in the shift from analog music to digital, not to mention video with the emergence of DVD. Today, it’s helping lay the foundation for newer technologies such as Blu-ray.” Over 200 billion CDs have been sold worldwide over the past 25 years The Compact Disc, is the forefather of today’s extensive family of optical discs for a wide range of applications such as CD-Rom, CD-R and CD-RW, DVD, DVD R, DVD RW and Blu-ray. Philips estimates that during the past 25 years, since the first CD was pressed at the Philips factory near Hanover, Germany, more than 200 billion CDs have been sold worldwide. Even though a single CD is only 1.2 mm thick, if all CDs ever produced were piled up, the stack of CDs would circle the earth six times. The compact disc, as well as the DVD, remains a very popular music/video carrier due to digital quality, portability and resilience to damage. For further information on the 25th anniversary of the Compact Disc, please visit: www.philips.com/newscenter

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