By BizLED Bureau
October 21, 2015: With intense competition in the general LED lighting market, LED giants are turning towards niche LED markets like smart LED lighting market. Even two years back, smart LED lighting was not believed to take off so early. But due to demand from consumers, this niche market has taken off before expectation.
With smart LED lighting market picking up fast, more and more manufacturers are focusing their strategies towards smart LED lighting, which is believed to be more profitable and hold immense market potential.
According to Transparency Market Research, the smart lighting market is projected to grow at a CAGR of 15.9% from 2014 to 2020 to reach US $56.62 billion in 2020. On the other hand, Memoori has estimated lighting control market to grow at CAGR of 12% from 2013 to 2020, and projected wireless lighting controls to grow at CAGR of 23%.
LED majors like Philips, GE, Osram, and others have all focused on this niche segment, and have introduced related products in the last two years. LED lighting manufacturers find this segment to be more profitable with value adding products like smart LED lighting or LED wearable devices. Moreover, traditional lighting businesses are becoming unprofitable year-on-year.
According to industry analysts, the lighting industry is facing three challenges?intense competition, slow growth (due to LEDs long life cycles) and low profit margins.
Due to the high competition in the LED bulb market, even LED majors like Philips are not only launching low-priced LED bulbs (two 60W LED bulbs for less than US $5), but also slashing LED tubelight prices to the level as its Chinese rivals MLS and Foshan Lighting is selling in the Chinese market.
Even the Chinese LED lighting manufacturers are witnessing decline in profits. For example, Kingsun Opto?s net profits plunging as low as 88% in 2014.
As a result, large lighting manufacturers are increasingly turning towards the smart lighting market as they see more profit. For example, while Osram continues to promote its smart lighting control products, while it says goodbye to most of its luminaire business.
Even Cree and TCP Lighting have partnered with WeMo to develop smart lighting products. While Cree and TCP will supply LED bulbs for smart lighting systems, WeMo will provide the connectivity technology.
Hence, LED lighting manufacturers are increasingly turning their resources from profitleless markets to more lucrative businesses and applications like smart LED lighting.
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