Traditional lamps and lighting are in the midst of a decline. According to IHS Technology, 2014 was a challenging year for some lighting manufacturers, as revenue and sales from quarterly lamp and luminaire declined. As a result, companies have made business decisions that have led to the restructuring of an organizational philosophy, or in other cases, restructuring product portfolios to include better-selling items.
As it stands, LED lighting is on the upswing, and companies are taking notice, if they hadn’t already. IHS stated that some traditional lighting components have experienced growth, such as halogen, because it is the next-cheapest option. However, those increases are not part of the growing LED lighting trend.
Unless manufacturers make the switch and offer LED lighting, they’ll find increasing difficulty staying in the lighting market.
All the major lighting manufacturers have drastically altered their product portfolios, which can be attributed to the competitive LED market.
Growth Projected To Increase
Energy efficiency is one of the few factors that has dominated the reason behind growth in the LED market. Technology has also led to an increase in reliability and life, and will continue to do so, according to the U.S. Energy Information Administration. Increased efficiency has two main effects: environmentally, efficiency is a sustainable initiative that helps lower the strain put on electrical grids. In addition, the EIA stated families are using less electricity over time.
Residential homes and commercial facilities that have yet to make the switch to LED lighting will likely want to make it a key investment in the near future. This transition is made even more attractive due to lower prices over time. LEDs are also a a smart investment because the technology lasts longer, thereby potentially lowering lighting costs later on. If trends continue, it will likely be even harder to buy traditional light fixtures and lamps due to manufacturers not seeing any value in continuing production of that segment.
In fact, IHS said the commercial sector does not see as much competition as its residential counterpart, and as a result, more lighting manufacturers are placing an increased focus on it. Organizations stand to therefore benefit from a greater selection of LED products and services.
By 2019, IHS estimates the global lamp revenue to be $34.6 billion. As a comparison, revenue in 2013 equated to $29.1 billion.
Need To Adapt
Consumers and commercial enterprises are increasingly making the switch to LED lighting. For manufacturers, they have to meet that demand while still managing the competition. The marketplace has become flooded with many products that are making it more competitive and difficult to establish a presence.
The signs are clear: LED lighting is here to stay and manufacturers that don’t change their portfolios will be left behind. LED technology show no signs of slowing down anytime soon.
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