by Brianna Crandall — May 10, 2017 — The light-emitting diode (LED) market evolution continues with a steep decline in cost per unit, high energy-efficiency ratings, market shift toward these lighting solutions, and favorable government initiatives driving adoption, according to a recent report from global growth partnership company Frost & Sullivan.
The Internet of Things (IoT) is expected to disrupt the market, shifting focus from energy efficiency, product reliability, and operations and maintenance (O&M) costs to include controllability, connectivity, and technology integration in smart buildings and smart cities.
According to Sabnam Gafoor, Energy and Environment research analyst for Frost & Sullivan:
New technologies driven by IoT, such as light-as-a-service (Laas), will usher in connected lighting and living, enabling better energy management and new services and business models like financing and leasing. On the flip side, new business models and an influx of new players from the Asia-Pacific will make the future market a fragmented one.
Global LED Lighting Market (2017 Update) finds that the LED lighting market accounted for almost 60 percent of global lighting in 2016 and was worth $47,303 million, growing 18.1 percent from the previous year. The research provides a detailed analysis of growth opportunities, technologies, revenue forecasts and competitor dynamics in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America. Strategic moves of major market players such as Philips Lighting, Osram GmbH, GE lighting and Cree Inc are also discussed.
The Asia-Pacific region contributes the most to global market revenues. Express construction in many Asian countries, government endorsement of energy-efficient lights in India and China, and the existence of a large number of LED chip and package factories in China, Japan, South Korea and Taiwan are factors driving growth.
Other developments in LED lighting include:
- IoT-enabled LED lighting will fast-track the growth of connected buildings and their services.
- LED lighting is likely to account for 80 percent of the total lighting market by 2020, creating an $80 billion market. By 2025, LED will account for 98 percent of the global lighting market.
- India, Asia-Pacific, Latin America, and Africa are set to record the highest growth rates.
- The residential LED lighting market will witness a year-on-year growth rate of 16.7 percent this year.
- Although residential, outdoor, and retail make the highest contributions at present, office, industrial and hospitality are expected to be future growth sectors.
- Organic LED (OLED) lighting is gaining popularity as a solid-state lighting (SSL) technology due to its ability to emit warm light over large areas, provide color comfort, and bring improved form factors to the lighting industry.
Gafoor’s advice to manufacturers gives an indication as to what is in store for the direction of the industry in the near future. He said:
To remain competitive and relevant in an evolving ecosystem, LED players should seek to improve manufacturing efficiencies by adopting a larger wafer size, utilize intelligent lighting through integrated control devices, implement active and passive cooling techniques for device longevity, and replace expensive substrate materials with cheaper alternatives.