The company says the move of the consumer-focused entertainment group will allow for a stronger focus on its health division.
Philips has reportedly sold off its entire consumer tech division to concentrate on medical and lighting equipment.
Redmond and LCD maker swap patent licenses, giving Funai access to key Microsoft patents on exFAT file system, valuable in storing audio and video content.
Philips will not be exhibiting at the 2009 Consumer Electronics Show in Las Vegas.
The Japanese electronics maker will pay a royalty to sell televisions under the Philips and Magnavox brand names.
Microsoft has an ax to grind against Linux, but it appears to be fighting for a customer, and not against Linux, in its TiVo lawsuit.
Funai announces plans to release a Blu-ray player in the second quarter of 2008 for less than $300.
Though we've been promised the technology for years and it has yet to really hit the mainstream, wireless high-definition shows some signs of life at IFA.
Another small TV maker finds it rough going in the current economic environment for consumer electronics, filing for Chapter 7.
As part of a makeover of its electronics department, Wal-Mart is making a renewed push with more models of cheaper Blu-ray players.