LED-Hot Competition: Osram Launches Low-Price LED Bulbs for Home Market

Frankfurt, Germany-based  Osram Licht AG — soon to be a spinoff of Munich-based Siemens (News - Alert) AG — is launching a new LED light bulb that costs just  $13.The product introduction is part of the company’s all-out  effort to beat Raleigh, North Carolina based Cree (News - Alert) Lighting and Seoul, South Korea-based based Samsung Electronics  for a share of the fast-growing LED home lighting market. Most comparable LED bulbs in Europe currently cost more than $20.

Light-emitting diodes (LEDs) present many advantages over incandescent light sources, including lower energy consumption and a longer lifetime. However, to date, LEDs powerful enough for room lighting have been relatively expensive.

Just six weeks ago, Cree Lighting launched a low-priced line of LED bulbs for the home market. The line of Cree LED bulbs will include three models: a warm white 60Watt (W)-equivalent at $12.97, a daylight 60W-equivalent at $13.97, and a warm white 40W-equivalent at $9.97.The company will soon have Energy Star compliance for each model — a meaningful seal of approval. Moreover, each bulb is backed by a 10-year warranty, much longer than the standard guarantee, so Cree is putting some weight behind their claims.

Meanwhile, on March 18, Samsung (News - Alert) Electronics Co., Ltd. announced that it had begun producing a new line of middle-power LED packages with the industry's highest efficacy level, making it ideal for use in a wide variety of applications including LED tubes, ambient lighting, down lighting and retrofit lamps. The Samsung LED packages will be officially introduced at LIGHTFAIR International 2013 in Philadelphia next week.  No price has been revealed to date.

A spokesman for Osram told Reuters (News - Alert) on April 15 that the company's new LED replacement for 40 watt incandescent bulbs would retail in Germany from June.

Last year, Osram commissioned New York City-based McKinsey & Company to create an unbiased research report detailing the future of the global lighting industry. By combining studies done specifically for the report along with hundreds of other key parameters, a model of the lighting market was constructed to predict the future of the market up to 2020. Lighting professionals from seven countries (the United States, Germany, Japan, China, Russia, Brazil, and India) were surveyed to get a broad view of the global market. The result is the first large-scale research of the global lighting industry.

The analysts found that, by the year 2020, revenues created by the global lighting market are expected to reach nearly $140 billion—a 63 percent increase within one decade. The main factors contributing to this growth are population growth, rising incomes, increasing urbanization, and concerns over climate change and scarcity of resources.

The study also predicted that, by 2020, LEDs could become cheaper than other forms of lighting. The analysts forecast that LED OEM lamp prices will drop roughly 30 percent per year from 2010 through 2015; and 10 percent to 15 percent per year from 2016 through 2020—leveling off at one-tenth of their 2010 price by 2020. Strong competition and R&D within the industry are main reasons for cost reduction.

As LEDs become more affordable, sales should begin to increase dramatically. It is expected that the LED lighting industry will grow at a rate of nearly 35 percent per year from 2010 through 2016; then, slow to less than 15 percent growth per year from 2016 through 2020, giving LEDs a global lighting market share of nearly 60 percent.