LED Light Bulbs Grow in Popularity

Philips 12.5W LED A19 bulb on sale on Homedepot.com for $22.97 US.

A big part of the market opportunity for sapphire is LED lighting.  When the LED lighting market grows, the demand for sapphire, one of the main building blocks for LED chips will increase too.  We’ve been tracking the LED lighting market and take a look at a recent report by Diane Cardwell in The New York Times, LEDs Emerge as a Popular ‘Green’ Lighting.

Cardwell examined the growth in popularity of LED lighting in the piece.  Cardwell notes that the energy-efficient replacement LED bulbs are popular with consumers despite being more expensive than traditional incandescent bulbs.  She also looked at the marketing success of LED lighting at retailers like Home Depot and technological improvements by manufacturers like Philips.

Cardwell reported that the growth of LED sales outpaced other lighting technologies in the residential market even though the market share still is small at 3 percent.  She attributes the growth to price decreases and the appeal of saving money on energy to consumers.

Brad Paulsen, from mega home retailer Home Depot, told Cardwell that he anticipates that LED technology will become the most popular lighting technology that is out there.  Home Depot has been selling LED light bulbs since 2009 according to information Bill Hamilton from Home Depot shared at a Department of Energy, 2012 Solid-State Lighting Market Introduction Workshop.  The retailer now sells 104 options online and in-store.  Consumers are seeing healthy price decreases.  For example, a Philips 12.5W LED A19 bulb (a 60W equivalent) decreased in price 37% to $24.97 between 2011 and 2012 at Home Depot and now sells on the Home Depot website for $22.97.

The Times article highlighted some interesting market statistics about LED lighting.  A-type LEDs, the most common bulb size that fits in home light sockets, will outsell incandescent bulbs in North America in 2014, according to market research firm IMS Research.  The firm also maintains that LEDs will become the most popular A-type technology by 2016 with North American shipments reaching almost 370 million, more than 10 times the roughly 33 million shipped last year.

Light bulb manufacturers are seeing LED lighting growth as well.  Cardwell noted that Philips, a major manufacturer of light bulbs in the US, saw LED light bulbs contribute to 24 percent of lighting sales in 2012. Overall LED-based sales grew by 51%, and now account for 24% of total lighting sales for Philips in Q3 2012. Philips took in over EUR 500 million, that’s around $650 million in US dollars, in LED-based sales for the third quarter.  That’s a lot of LEDs.

For Further Reading

Bill Hamilton, Home Depot presentation, Department of Energy, 2012 Solid-State Lighting Market Introduction Workshop, http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/hamilton_trends_pittsburgh2012.pdf

New York Times, LEDs Emerge as a Popular ‘Green’ Lighting, http://www.nytimes.com/2013/01/22/business/leds-emerge-as-a-popular-green-lighting.html?_r=0