Royal Philips's (PHG) strategic transformation from consumer electronics to healthcare innovation is well underway. The company's goal is to improve the lives of three billion people a year by 2025.
But the transition has been a bumpy ride for investors. Shares of the Dutch manufacturer have slumped amid a recall of its sleep apnea devices.
Royal Philips CEO Roy Jakobs joins Yahoo Finance Live to discuss the recalls as well as the company's measured adoption of AI-powered solutions.
"We do it in a responsible manner... The National Academy of Medicine has gathered tech companies, providers, regulators and government officials to develop a code of conduct for responsible AI application," Jakobs said. "AI can come to the rescue but, of course, you need to be aware of what it can and cannot do."
Jakobs added: "The closer you get to the patient, the more careful you need to be."
ANJALEE KHEMLANI: And certainly opening up a new avenue for consumer health care, as we know it because you have this middle market that's not quite consumer, not quite clinician. And so that gives you the opportunity to create more products.
We cannot start off the day, of course, without talking about the past. You have had the largest recall with the respiratory machines. And just recently, the FDA called out again with overheating problems. Do you think that there's something to be said about how complicated it is to, in this world of high tech, create safe products for users to use that aren't in the clinical space?
ROY JAKOBS: Yeah. Patient safety and quality is paramount. And that's something that also when I stepped into the role, I said, it's the number one priority for the company. We have put a world class team on it. And we are working through the challenge and actually making significant progress.
We also saw that coming in how the Philips recovery over the full year is shaping up. We have now quarters of growth. We are actually year-to-date ahead of the plan. We upped our guidance twice. And we're doing that under the umbrella of looking at health care and how we can provide the best quality care to them, looking at the time that we can give back. But, of course, also making sure that in the application, for example of AI, we do it in a responsible manner.
We are part of a consortium, for example, in North America. The National Academy of Medicine has gathered tech companies, providers, regulators, government officials to look at a code of conduct that we are together developing for responsible application of AI. Because AI can come to the rescue. But, of course, you need to be aware of what it can and cannot do.
There's a lot of routine tasks that you can go after now to get immediate impact, as I was just sharing. But, of course, the closer you get to the patient, the more careful you need to be, whether you have really well tested it, where you do it in an inclusive manner. And that's something we are doing with cross-industry participation.