Why, you might be tempted to ask, does Philips Electronics (NYSE:PHG) not get the same kind of love as companies like General Electric (NYSE:GE) or Sony (NYSE:SNE)? It can't be just about margins -- Philips' aren't good, but neither are Sony's. Instead, I think it's largely about perception. For all of its screwups, Sony is still considered a consumer technology leader, while Philips sometimes seems more like a dog's breakfast of business units, dominated by semiconductors.

While Philips has been saying the right things for a while now, this second quarter shows that there's still a ways to go on the "doing" side of the ledger. Sales were up about 10% (and beat estimates), and operating income more than doubled. That's good, but the company continues to be hamstrung in the market by businesses like semiconductors and flat panels, where there's less of a sustainable competitive advantage. That's not so good.

Eventually, I do see the company turning into the sort of business that its management wants us to think it is. The semiconductor business will probably be IPO'd later this year, and I would still expect further share sales of stakes in Taiwan Semiconductor (NYSE:TSM) and LG.Philips (NYSE:LPL). Not only will those moves generate cash, but they should also help make the company a bit more like General Electric -- and a little less like STMicroelectronics (NYSE:STM) or Infineon (NYSE:IFX).

In the meantime, more patience will be needed. Philips does well enough against rivals like Toshiba, Helen of Troy (NASDAQ:HELE), Procter & Gamble (NYSE:PG), and so on, but building better brands (and developing a hot product or two) in consumer electronics and appliances would certainly help.

There's nothing wrong with buying an undervalued stock like Philips, now that signs of improvement seem increasingly evident. But take a look at how closely the fate of these shares tracks that of Taiwan Semiconductor, and you may be inclined to wait -- unless you really want a proxy on the semiconductor space.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares.)