It is hard to imagine that a technology that has successfully existed for 130 years would be the catalyst for arguably the most en vogue market opportunity in our industry today: solid-state lighting (SSL).
While SSL currently represents approximately 5 percent of the overall general lighting market, its market penetration is predicted to accelerate to 50 percent in the next five years. While there are many drivers behind this significant market opportunity, I’d like to highlight three that I believe are creating a perfect storm for an industry in transition.
The technology has surpassed traditional light sources
Technological advances in SSL now offer significant benefits over traditional light sources in terms of both lumens-per-watt performance as well as lifetime. When designed properly, an SSL application can last in the 50,000-hour range. Think of a world where you’ll eventually never have to change a light bulb in your lifetime. In addition, the breadth of new products being developed is helping to solve specific lighting challenges, further accelerating the transition. Customers today have multiple entry points, based on their needs, from discrete custom designs, arrays, and complete module solutions.
The green effect
The benefits of SSL versus many traditional light sources are well documented on this front. Traditional light sources contain mercury and lead, creating significant disposal and landfill issues -- challenges that don’t exist with SSL. Given these dynamics, we continue to see an increasing level of regulatory activity (California Title 24, EU and US incandescent bulb bans, Energy Star, etc.) in support of SSL.
Economics for change
For many, this is a classic cost-of-ownership analysis. Does the combination of energy savings and reduced maintenance costs deliver an acceptable pay-back period for transition? While we’ve yet to hit the tipping point for all applications, we’re certainly seeing an increasing number of fixture manufacturers answer “yes” to this all-important question.
It seems to me that this is one of those “whole being greater than the sum of its parts” situations. While each of these trends is compelling in itself, when combined they deliver a more powerful value proposition and business case for change.
With SSL currently representing a small percentage (approximately 5% according to industry sources) of the overall general lighting market, there is still tremendous growth upside for SSL to penetrate existing lighting applications. In addition, continued advancements in LED technology will continue to open new applications that may not be on the radar screen today.
While LED based consumer products have been on the shelves of big box retailers for some time, it has been hard for the average consumer to understand what is a quality product and how it compares against traditional light sources. That said, the technology, performance, pricing and even product labeling is enabling better quality products to make their way to store shelves and accelerating adoption.
Some of the comments point out that the lifetime is not really a USP of LED, I would disagree. While, It might not be that great a value proposition for a lay consumer, we need to understand that the growth that any such industry targets is not through replacements but through more applications. Industrial applications, street lighting, bay lighting, decorative lighting, Transport system, Hotel Industry all of them see a great value in lights that wont fail! Changing a couple of bulbs in our home might not be a big deal, but for large scale applications it could be a nuisance. Hence, a long lifetime for LEDs as well as the electronics is essential if it has to be successful in all the new application areas.
The point I wanted to make here is that the product designers should not now concentrate on increasing the life time of the product beyound a certain limit. This will greatly reduce the cost of the endurance testing, the cost of the material used and the time to market a product. When Chinese or Japanese or koreans bring new products into the market at much cheaper cost they provide products with limited life time and in this everchanging world nobody wants to keep a product for life time even if is still good. Americans and Europians have a lesson or two learn from here.
Prabhakar, i agree with your opinions. Lifetime is not an issue as long as we can afford the new. The classic examples are in the electronics industry itself and you mentioned some of them.
jbond, although you have an excellent point that manufacturers will not like if a single light runs for years. But lifetime has never been a problem to growth. As the LED will consume less energy and can open up other possibilities of usage, i am sure that growth will be sustained. For example, a pair of jeans lasts for years but we still have more than one pair and we throw them away even if they are not torn apart. We go for new, fancy ones. Another example are mobile phones, TVs and other electronics. We replace them much before their breaking point.
Life time is just a selling theme. In reality, it is not good to buy something and not having to replace ever. If everyone doesn't buy new things, then the business will not thrive and money will not be made.
But LEDs are great. Saves energy and good for environment and pretty neat looking too.
In todays world of everchanging technology , the word life-time does not make much sense. In the last two decades there have been many products which would have lasted our life-time but still we threw them in the junk yards just because something totally new just replaced them. My Kodak film camera worked for me for 20 years and was still in a very good working condition and would have lasted my life time but I put it into my junk box because the totally new digital version is much better. Same thing must have happened to those rugged Nokia mobile handsets owned by many. Same thing will happen to the SSL. There will be new versions , new materials, new form factors and the consumers will be forced to throw the old things to keep up with times. And the promise of 50000 hours of life will never be tested in practice.
As lighting technology advances from setting things on fire to incandescent bulbs and potentially to LED's, it's inevitable that the market for lighting will be less and less active--mature, you might say. Holding this as a barrier to the technology doesn't make sense in the long run when you consider the benefits to be reaped. SSL fixtures would be like housing materials, a piece of sheetrock that has the added features of illumination. Maybe I'm oversimplifying things, but sheetrock is a result of innovation and some R&D--it's more than just gypsum and water I believe, yet you don't replace it every six months and people do make their livelihood making and selling it.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
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Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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