Report: Lighting manufacturing leaders to shift

Philips, Osram, and GE have dominated the lamp industry for decades, but as governments ban incandescent lamps in favor of more efficient technologies, other companies, such as Samsung, Toshiba, and LG, are now taking up more and more of the lamp market share.

12/19/2013


For decades, the lamp industry has been dominated by three players: Philips, Osram, and GE. In an industry where people are using the same technologies they were in the 1900s, it’s no wonder these three have been dominant for so long.

Governments have begun to ban incandescent lamps in favor of more energy efficient technologies, leaving everything up in the air. Incandescent lamps – the largest installed base of lamps in the market – have dominated household sockets for years. So the big question has always been: When incandescent lamps go, what will take their place? Compact fluorescent lights (CFL), halogen, and more recently light-emitting diode (LED) lamps have been increasing their market share, but what will be the impact on the competitive environment?

We forecast 2014 will be a big year for LED lamps, accounting for 32% of the entire global lamp revenue. Companies are likely to expand their LED lamp portfolios to ensure their products end up on the retailer shelves and then installed in people’s homes. It’s quite obvious to see this trend as some lighting companies who hold share (Havells, TCP, Panasonic, etc.) are broadening their LED lamp portfolio to ensure they don’t get left behind.

In 2012 and 2013, LEDs were still too expensive for an average consumer to make the switch, but as more companies compete for a space in the living room, these prices are coming down fast. Some of the incumbent manufacturers have reacted slowly to the price changes and have started to lose share.

With fierce competition in the market, manufacturers have to take smaller margins if they want to be competitive in the residential sector. Companies such as Samsung, Toshiba, and LG, who have a substantial business outside of lighting and benefit from manufacturing LEDs, will be able to hang on longer, while pure lighting players have to either accept lower margins or move out of the residential sector altogether.

The primary factor will be price, but brand recognition and brand reliability will also play an important role. So when will companies such as Panasonic, Havells, Samsung, Toshiba, TCP, and LG become a real threat to the Big 3?

IHS' full detailed quantitative analysis of the lighting market can be found within the Lighting – World – 2013 Report. 



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