Global lamp revenues are expected to increase from US$29.1 billion in 2013 to US$34.6 billion in 2019, equivalent to a six-year CAGR of 2.4%. During the same time period, worldwide LED revenues are set to climb at a CAGR of 16%. In comparison, revenues for traditional lighting technology is expected to fall at a CAGR of 7.2%, according to IHS.
Given the high growth level for LED lamps, the market is attracting a great deal of competition from lower-priced China makers, in the process squeezing margins that could continue to decline over time. Such a development, in turn, could cause some manufacturers to leave the market altogether if they cannot compete at the low price points.
Meanwhile, the commercial segment, which has seen less competition than the consumer segment is where a number of makers are placing increased focus. In some specific applications like retail and hospitality or theaters, higher-quality lighting or specialty lighting areas are required, so these applications tend to have less competition and also enjoy comparatively relatively higher levels of LED adoption.
Overall, the lighting market has more competition than ever due to the potential lucrative gains that can be made. Market segments such as the residential sector are not only exceptionally competitive but also represent areas where a number of Western manufacturers are known to be struggling.
If these beleaguered suppliers can specialize in one or a small number of sectors and are able to create products tailored to meet the needs within those applications, a much greater chance of higher revenue growth and margins for them could be available in the future, IHS believes.
