Light Sources Overview: LED Lights the Way

Strategy Briefing

About This Report

Sep 2014

The global light sources market has recovered strongly since 2009, largely driven by the Asia Pacific region, particularly China. However, value growth slowed in the latter part of the review period, as competition between categories got tougher and prices of LEDs declined. With governments worldwide phasing out incandescent lamps and LED lamps becoming the centrepiece of the connected home, sales growth in this market is set to strengthen over the coming years.

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Light Sources Overview: LED Lights the Way

Rising electricity costs lead to calls for greater bulb efficiency

Minimum energy performance standards become the new norm as electricity costs have risen significantly in most regions. Consumers now expect lighting products to help save money on their bills.

Product innovation rather than replacement drives consumer demand

As incandescent bulbs are replaced by low energy alternatives such as halogen, CFL, LFL and LED, consumer preferences will be determined by the lighting characteristics of these products, such as colour, temperature, light shape and intensity, rather than just low energy consumption.

The extended life of energy efficient bulbs, also reduces purchase frequency, making innovation vital to boost sales.

A wide variety of applications using internet connectivity and halogen bulbs and LED lamps, means more lighting products becoming part of the “internet of things”.

Rapid trend changes means rapid product development

Manufacturers must be able to understand and adapt swiftly to rapidly changing consumers’ tastes and preferences. Sales trends are also diversifying regionally, with more pronounced category-shaping variations, occurring more quickly.

New products challenge LEDs

While LED is only starting to establish itself as the new bulb standard, other technologies are queuing up to offer more differentiation. OLED is getting a lot of the attention but it is one of a number of innovative developments that threaten the standard of LEDs.

What this report includes

  • Top-level strategic analysis of how major consumer trends will influence global markets
  • Consumer insight
  • Impact across all relevant consumer markets
  • Unique graphics and case studies
  • Key market snapshots
  • Accompanying presentation to synthesise main findings

Why buy this report

  • Identify factors driving change now and in the future
  • Understand motivation
  • Forward-looking outlook
  • Briefings and presentation should provoke lively discussion at senior level
  • Take a step back from micro trends
  • Get up to date estimates and comment

Introduction

Scope
Key findings

Market Overview

Electrification a key driver of volume demand for light sources
Growing demand for light sources amid category shift
Light sources market size: China is the global leader
Global light sources growth relies upon a few markets
US: Pricing hampers the development of LED lamps
Incandescent lamps go into oblivion everywhere, except…
Canada’s belated ban will spur LED lamps demand
UK takes the lead in halogen lamps
Brazil tops CFL sales per household
France on the verge of discarding incandescents

Growth Drivers

GDP growth positively correlated with electricity consumption
Top-down approach in India suffers from poor execution
Low quality CFLs deter demand in some countries?
Expenditure on electricity key to purchasing patterns

Regulatory Environment

EU
US
Asia Pacific
Latin America

Socioeconomic Drivers

Smaller households in China carry both opportunities and risks
Energy efficiency goals in the EU
The nuclear question
Japan and Germany showing the way out of nuclear energy
Environmental concerns rise in China amid economic slowdown
Green taxes scrapped in Australia and potentially in UK
Shale gas in the US cuts electricity prices for consumers
Housing market: A slow recovery cast in doubts
LED inspired design in retail and public space could fuel interest

Industry Trends

Osram needs to catch up after Siemens spin-off
Global players fail to gain market dominance
Samsung and Philips to spearhead digital home innovations
Grocery retailers clear winners of energy efficient lamps
Private label goes from strength to strength
IKEA pledges to sell only LED lamps by 2016

Future Directions

Future dynamics
Urbanisation and smaller households as key growth drivers
Incandescent lamps on the way out
Beyond LEDs, more innovations loom
Lighting to venture into leisure and wellness industries
Final conclusions (1)
Final conclusions (2)