The Philips name, however, will remain on WOOX equipment through 2017, as intellectual property assets are untangled. Like Philips, some of WOOX's products run on Android software.

Shares in the company had marched forward nearly 70% since it announced its broad restructuring in early 2012. The restructuring puts it in a sweet spot of home automation, with a line of entertainment products, appliances, and LED lighting fixtures just begging for software to connect them all together.

Philips is looking to Google (GOOG) Android to do the connecting. It has even brought out an Android phone. Software for its line of LED light bulbs, called Philips Hue, is also available on GitHub, the open-source software repository.

The company has a number of other Android apps working with its products, including Fidelio for lighting and MyRemote for its TVs. Its new line of TVs will all run Android software as Philips becomes an increasingly important Android OEM.

Philips is also taking its LED and Android expertise into government markets, teaming up with Ericsson to create a "lighting as a service" model for cities, with Ericsson providing the wireless broadband and Philips supplying the bulbs and software. 

So while the short term does indeed look "challenging," as the company admits, Philips seems to be in a good position to take advantage of the "Internet of Things," with lots of things that need connecting and Android software to connect them all. As tension fades and the euro falls, the shares could do very well.

At the time of publication the author owned shares of GOOG.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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