LED Lighting Industry Trend US
Since the research instructions don't specifically focus on the 'top' trends, we focused on data regarding general trends currently present and potentially happening in the future in the US LED industry. Looking at industry reports on the subject led to a compilation of eight current industry trends and four potential industry trends. The current trends in the LED market involve growing mergers and acquisitions in the market, application of non visible LED lights, increasing awareness of energy saving, rising electricity prices in the US, development of lighting sales channels, external legislation and subsidy programs, further sales growth and introduction of light-emitting diodes. The potential industry trends are as follows: slowing LED market growth in the near future, shrinking profit margin, increasing replacement lighting market penetration and the increasing value of non-visible lighting applications.
LED technology has a unique sets of values that it can offer to consumers over traditional technologies. This involves the fact it offers "halogen, incandescent and compact fluorescent lamp (CFL) lighting". It also offers more versatility than other technologies and LED lights are "currently three to five times more energy efficient than traditional technologies and will become even more efficient" which is important to consider when thinking about the fact that "more than 50% of the total cost of lighting comes from the energy consumed". Additionally, LED lights are offered in a big range of colors, with the added advantage of LEDs coming in small sizes which offers different innovative applications. Another important advantage LEDs have is their longevity, as they can last ten times longer than incandescent lamps and 4 times longer than CFL lighting.
Since the research instructions don't specifically focus on the 'top' trends, we focused on data regarding general trends currently present and potentially happening in the future in the US LED industry. Looking at industry reports on the subject led to a compilation of eight current industry trends and four potential industry trends.
Current industry trends
1. GROWING MERGERS AND INTEGRATIONS IN THE MARKET
The bigger, more organized players in the market, especially in the US, have started to secure and maintain their position by merging with and acquiring the lesser players that have just entered the market.
2. APPLICATION OF NON VISIBLE LED LIGHTS
Non-visible LED spectrum includes ultraviolet (UV) and infrared (IR) LEDs.
A strong atmosphere of competition among manufacturers in the LED market led to a creation of "an environment where each vendor introduces new concepts to out-do the competition. This competitiveness has led manufacturers to focus on LED applications in the non-visible light spectrum such as the use of UVs or IR LEDs".
3. INCREASING AWARENESS OF ENERGY SAVING
The U.S. government, as well as the individual producers of LED lights, are putting a lot of effort into making "people know about the positive impacts of using these lights over traditional means".
4. RISING ELECTRICITY PRICES IN THE US
The rising prices of electricity are making people think about how to reduce costs and consume less energy, which leads them to switch from traditional sources to LED lights: "Smart lighting is expected to offer lucrative opportunities for application in commercial and industrial areas. It has the ability to adjust the amount of light required using control zones. Smart city schemes have become prevalent in the U.S. and Europe with rising focus on strategies to reduce peak power demand and the overall consumption of energy."
5.DEVELOPMENT OF LIGHTING SALES CHANNELS & OPPORTUNITIES
During the recent years, the amount of lighting agents and retailers increased in the US.
The ever growing need to interconnect smart devices and systems led to a new opportunity for LED manufacturers. Now, the manufacturers of smart phones and other IoT devices are starting to integrate LED systems into different devices.
The potential growth can also be seen in the large "penetration of smartphones and energy saving advantages associated with connected lighting systems" that are thought to be the new drivers of the market for LED lighting, particularly in countries where technology is adopted fast, e.g. United States.
6. EXTERNAL LEGISLATION AND SUBSIDY PROGRAMS
The U.S. government recently banned the sale of some forms of incandescent lighting, which leads to more consumers switching to LED lights as the more accepted alternative.
7. FURTHER SALES GROWTH
The benefits that LED lights offer over incandescent and fluorescent lamps is the reason why LED lighting market is seeing growth at the moment. LED lights offer efficiency, higher brightness and longevity.
More and more LED lighting is used for outdoor application, mainly roadways, traffic lights, tunnels, parking lots, and garages. This new lighting sales channel is expected to secure an additional growth of the market, but is so far categorized as an opportunity.
Additionally, the US market is expected to see growth when it comes to outdoor and residential application LED sales. On top of that, manufacturers such as Philips and General Electrics are constantly offering innovative solutions in order to attract customers on a global scale.
High production costs can have a big impact on the future of the LED market. However, the increasing use of LEDs in screen and display backlighting can be seen as the drivers of additional demand to the market.
8. INTRODUCTION OF LIGHT-EMITTING DIODES
Light-emitting diodes (LEDs) are "a type of solid-state lighting (SSL)" which are considered to be the transforming force of the entire lighting market. LEDs are better performing in "terms of lifetime, energy efficiency, color quality and versatility," and due to "their increasing cost competitiveness, this technology has begun to successfully compete in a variety of lighting applications".
Potential industry trends
1. SLOWING LED MARKET GROWTH IN THE NEAR FUTURE
The growth rate for the entire industry is expected to not be higher than 10% in the next five years.
2. SHRINKING PROFIT MARGIN
There is a chance of numerous manufacturers withdrawing from the LED market in the next few years based on the fact that LED lighting is now sold for a price that is very close to manufacturing costs, which reduces companies’ profitability.
3. AUTOMOTIVE LIGHTING REVOLUTION
LED automotive lighting introductions have grown from only the most expensive car models to all models in the high class as well as the middle class.
4. NON-VISIBLE LED LIGHT APPLICATIONS INCREASINGLY VALUED
As the market for LED lighting is extremely competitive, there is a big need to develop special lighting applications such as non-visible LED lights in order to drive more profit.
Among the current LED lighting industry trends are growing mergers and acquisitions in the market, application of non visible LED lights, increasing awareness of energy saving, rising electricity prices in the US, development of lighting sales channels, external legislation and subsidy programs, further sales growth and introduction of light-emitting diodes. The potential industry trends could lead to a slowing LED market growth in the near future, a shrinking profit margin, an increase in replacement lighting market penetration and an increase in the value of non-visible lighting applications.