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26-Jan-2015

WinterGreen Research: The phase out of incandescent lights has begun

The emergence of cost-competitive LEDs has caused a "paradigm shift" in the lighting industry that has changed everything. The LED lighting industry rapid technological change has been brought by enormous changes in the regulations affecting lighting. Short product lifecycles are a result of new manufacturing and materials science that are the result of companies trying to improve the economies of scale to make price points more attractive to customers.

Frequent product introductions have characterized the LED lighting industry. There is a highly competitive pricing environment with the current price point of $6 per light in 2015 about to decline further, creating competitive changes in the lighting markets. Technology innovation creates market characteristics that increase the need for continuous investment in research and development. Partners remain core to vendor positioning.

Sales of LEDs that outpace incandescent bulbs in North America are expected to soon completely eliminate incandescent bulbs. The LED lighting market is anticipated to grow 45% per year through 2020 LED lights at $13.6 billion in 2014, are anticipated to reach $63.1 billion by 2020.

Markets appear to be moving toward 100% LED replacement of existing technology including incandescent bulbs. The reason is the declining price points, the increased interest by the channel in pushing LEDs to consumers. LEDs provide the best lighting solution. The phase out of incandescent lights has begun, the onset of LED command of the market is upon us.

Philips is to sell its lighting business. The market leader has been the first casualty as the profit margin on the individual LEDs is eroded because of overproduction in China. The achievement in price declines is because of economies of scale, and general competitive pressure have drastically affected the market.

Epistar is working on 200mm technology. Philips, OSRAM, and Samsung have been actively exploring GaN on silicon technology. Market shifts provide entry points for new competitors.

There is a move by vendors to provide more pieces of the LED light. In this way they seek to control their margins. Vendors primarily compete with other providers of LED lighting on the basis of product performance, as measured by efficacy, light quality, increased lumen output and reliability. Product cost combined with an acceptable level of quality is always a competitive issue.

More information:
wintergreenresearch.com

 
 
 
 
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