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IMS Research Analyst Blog
LEDs Go Mainstream at Frankfurt Show
Date: 16 April 2010
April 16th, 2010
by Jamie Fox
While this month’s biannual Light and Building show in Frankfurt will be remembered by many people who attended it as the show where a volcano delayed their flight home, the real story of the show was that LEDs dominated so many booths at the show. Many people who had attended both this show and the 2008 version commented that the difference was quite substantial, both in terms of more booth space given to LEDs, the quality of products (CRI, colour temperature etc) and also the fact that LEDs were taken more seriously. One attendee who had also attended in 2006 said that LEDs were treated like a “science fair project” back then.
In 2010 many booths were completed dominated by LED, a clear indication that LEDs are now accepted as the future of general lighting in at least most applications. Of course, the fact that a manufacturer had 50% or 100% of their booth dedicated to LED can often be misleading in terms of their actual sales. Apart from a few smaller companies that are specifically focused on LEDs, all the major lighting companies surveyed by IMS Research at the show reported 10% or less of their sales for LED at the moment, in some cases a lot less than 10%.
LED street light modules were found on many booths at the show, for example Everlight and Osram displayed them as well as many others. Down lights were also very visible. Some manufacturers think that these could be poised to be one of the applications likely to do very well in the coming year or two. Another good candidate for the next year or two will be high-bay lighting, while street lights, refrigeration and retail lighting should continue to do well.
Areas that are going to be longer term include fluorescent strip lights in offices, where the efficiency of the incumbent technology is very high, meaning LED penetration is likely to be a long term objective. Another area that will be longer term will be bulbs for residential applications. Consumers unlike businesses are normally driven more by the upfront cost than the payback period. In addition, lights in residential applications might only be used for 1 – 4 hours per day, which is much less than in a commercial environment, and therefore the payback period is longer in any case. (An exception to the expected low penetration rate in the next 2 years or more is Japan, where LEDs already have some traction due to higher energy bills.)
The form factor of an LED bulb for a retrofit is arguably not naturally suited to the technology in some respects, and the bulbs do still require a heavy heat sink. Having said that, some manufacturers explained to me that an LED retrofit bulb is quite easy to produce. The products may not bring massive profit in the short term, however sit well within a company’s portfolio as a showy product to demonstrate a company’s long term vision and commitment to green issues and new technologies. An examples of a bulb launched at the show was Toshiba’s Ecore, an LED bulb which uses Nichia LEDs. LED On were another example of a company that had LED bulbs on display at the show. Bulbs were typically in the range of 25W or 40W incandescent equivalents. Typically, the 60W equivalent will be a new product or available soon. As for the 100W equivalent products, most manufacturers do not have these available yet. I didn’t see any examples at the show.
Bulbs prices are currently so high (€20-€40) that even myself, an LED analyst, hesitate about buying one to try out. Prices will naturally fall as LED efficiency and cost improve, but for these to be sold in significant volume they need to reach a price of €5-€10, something which will probably take a number of years. However, if these green, energy-saving, mercury-free bulbs do benefit from substantial public subsidies of one form or another, there is a possibility that a significant market could develop in only 2 years, however that seems to be the best case scenario at the moment.
As an LED analyst, there is a danger that talking too much to LED companies could produce a bias in my own analysis, however having said that it was not too hard to find a few people at lighting companies who dare to put forward a dose of realism/pessimism regarding LEDs (although they now seem quite defensive when they do). People reminded me of projects where LEDs have been installed and the results have turned out to be poor in terms of quality, while another reminded me that the standard LED lifetime claim used to be 100,000 hours and now it seems to have mysteriously fallen to 50,000 hours. Another listed to me all the LED companies at the show that don’t even use LED for the main lighting for their own booth. However even all the doubters think that LEDs will get there in the end. I asked almost everyone I met at the show if they thought it was true that LEDs will take over in the end and no-one disagreed with that. Another survey I did was what applications will LEDs never penetrate. Only one person could think of one – an oven. And the lack of ability to develop a market for LEDs in ovens is not going to greatly worry the manufacturers of LEDs as they take over the rest of the lighting market. So it really does seem to be a question of when rather than if.
On my way back to the UK I shared a taxi with two lighting designers from South Africa from Frankfurt to Calais, the French ferry port that is almost within sight of England. The experience of the chaos at the ferry port did not encourage them to want to commit to Frankfurt 2012. Also, many of those who had to return to the US and Asia were stranded for several days. Hopefully such an experience will not put off anyone in the LED industry from returning in 2012. If we were to extrapolate the amount of extra LED in 2010 to 2012, then LEDs would take over the show entirely in 2012!