Low price has been the key to success in the LED industry as market penetration rates rises. However, manufacturers will need to look into different avenues to keep ahead of the pack as price competition intensifies. Ray Chock, Philips Lumileds Sr. Director of Marketing and Business Development shared his insight on where the industry is heading in regards to the lumen per dollar trend during LEDforum at Guangzhou International Lighting Exhibition 2014 on June 11 in China.
LED bulb prices drop dramatically
LED bulb prices have dropped over the past few years in an effort to boost consumer acceptance. When LEDs started to show up on retail shelves, they carried a hefty price tag of about US $40 or more. With the availability of super cheap incandescent bulbs, consumers were not ready to accept more expensive LED bulbs.
However, as the years went by, LED bulb prices dropped much lower. Philips smooth design bulb released in 2013 for example had a retail price of less than US $10,
well within consumer¡¯s price range. Bulb prices have the opportunity to reach US $2.50 in the near future which will make them highly competitive with their energy
efficient CFL counterparts. However, manufacturers have put too much focus on cost and less in other areas including quality and performance.
Look beyond lumens per dollar
¡°It is not all down to LED cost,¡± explained Chock. ¡°A lot of people think about lumens per dollar. However, we just did a lot of analysis that says that high performance matters more than cost. High performance is able to reduce the LED count.¡±
¡° You do not have to have as many LEDs or they can be smaller which allows you to reduce the size of the heat sink,¡± added Chock. ¡°Most heat sinks are made out of aluminum which is a raw material that is increasing in cost. LEDs are only 20-25 percent of the total material of a bulb, so it is becoming less of a factor in the overall cost of luminaires. So when you look at things like that, the system becomes more important than just the LED itself.¡±
With so many low priced LED bulbs available on the market, consumers will be looking for something more than just price when selecting products. Low priced LED bulbs that have poor light quality and performance will not be able to compete with slightly more expensive bulbs that offer consumers higher light quality and lumens per watt. Therefore, manufacturers need to look past slashing costs to keep a competitive edge that prevents them from being eliminated.
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