Light bulbs: Charge of the LED brigade | The Economist

A recent report by McKinsey, a consultancy, reckons that by 2020 LEDs could make up 59% by value of the total lighting market compared with 10% in 2010 (see chart). Revenues from lighting will hit €110 billion ($160 billion), roughly what the world will spend on televisions.

The change is being driven by regulations, technical improvements and fickle consumers. Nearly half the world’s light sockets have an incandescent bulb, according to Philip Smallwood of IMS Research. Conventional bulbs have changed little in a century because they are cheap, convenient and do an excellent job of shedding light. Yet lighting consumes 25% of the world’s electricity and wasteful incandescent bulbs give off plenty of heat as well as useful light. America, Japan and the EU are close to phasing them out; other countries are set to do so too.

The current drawback is price. The newest LED equivalent to a 60-watt bulb costs more than $40, compared with around $1 for a regular bulb. But prices are falling rapidly. According to America’s Department of Energy new production technology should see costs tumble. In ten years’ time LEDs will cost a tenth of the current price.

For the world’s “big three” light bulb-makers—Philips, Osram, an arm of Germany’s Siemens, and GE Lighting have around 60% of the global market—this represents something of a dilemma.

The bulbmakers hope that consumers will change their lights as new and better ones come along, not because the old one is broken.

They should not be too gloomy: the immediate future is bright. McKinsey predicts that the global lighting market, worth €69 billion in 2010, will grow by around 60% in a decade (not least because of the relatively high price of LEDs). As Mr Smallwood points out, more light and increasing wealth go hand in hand. The average American home has 42 light sockets compared with about 15 in China. And LEDs will be used both for new lighting and to replace old fixtures too.



via Light bulbs: Charge of the LED brigade | The Economist.

This would be a nice case study for Thai students: How to get people buying those LED?

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