Why continued innovation is crucial for the LED market

The longevity of LED bulbs means it is important that manufacturers bring new and innovative solutions to the market, to encourage continued sales.

Innovation is continuing apace in the lighting sector, as manufacturers create increasingly powerful and efficient solutions for homes and businesses. LED technology advances year-by-year, bringing ever-more effective light bulbs on to the market at increasingly attractive price-points.

With the cost of LEDs gradually reducing, it is becoming cheaper for households and businesses to upgrade their lights. The bulbs still cost more than traditional incandescents, but innovation and industry competition is making them more affordable at the point of purchase.

Factor in the longevity of LEDs – good quality bulbs can last decades when used properly, in the right conditions – and these lighting solutions represent superb value for money. Having installed LEDs on your property, it could be years before you have to think about investing in a replacement.

A quandary for manufacturers

But what does the availability of affordable, long-lasting LED bulbs mean for the product manufacturers? They are reliant upon shifting units to generate revenue, and with customers buying fewer bulbs, due to their longevity, and spending less, due to falling prices, there is pressure on their business model.

According to Jason Knott, editor of CE Pro, the response from the lighting industry to this pressure on the bottom line is to keep innovating. Writing for the news provider, he claimed that the advent of smart bulbs will open up a new income stream for LED manufacturers, ensuring they are able to protect their profit margins.

“Smart bulbs are likely to be linked to lighting control systems, or at least introduce the homeowner to the concept of lighting control,” Mr Knott stated. He explained that smart bulbs include microprocessors which allow them to do things like blink when the phone rings, or simulate a sunset to help people fall asleep. He said these functions can be done with lighting control systems, meaning there is no need for the homeowner to use an app on their mobile device.

Increasing the functionality of LED bulbs may be the best way to ensure customers keep buying new models, the expert claimed. With the bulbs offering a greater range of features, manufacturers may be able to justify higher prices, ensuring they generate the revenue they need. Mr Knott said ‘smart lighting’ will likely become a focus for bulb manufacturers, and over the long term should elevate the lighting control industry.

Investing in LEDs

At the moment, many households and businesses are still upgrading from incandescent and halogen bulbs to LEDs, ensuring there is plenty of demand for these low-energy bulbs. LED manufacturers’ profits will not come under pressure until the majority of buildings have been equipped with LEDs, and sales start to slow.

This is when product differentiation will become important. Households and businesses are always seeking new products and services that improve on their existing provision, so as long as the next generation of LEDs are able to deliver something unique and attractive, there should be no shortage of customers eager to take advantage.

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