Prior to the advent of LED lamps, the lighting market was relatively unchanged for decades. While the introduction of CFLs as the energy efficient A-lamp of choice in the early 1990s did lead to certain shifts within the market, the negative perception of the public towards their "white" light and quality control issues did not allow them to strip incandescent lamps from their perch as the number one lighting technology, according to IMS Research. Today, in the US, CFL lamps only make up approximately 20% of the residential installed base.
IMS Research senior analyst Philip Smallwood stated that "LEDs have changed the lamp world for good. The apparent global effort to phase out most incandescent A-lamps by either banning them or introducing minimal energy efficient standards is opening up the market in a way that would not have been possible in the past."
The effect that the mass adoption of LED lamps will have on the market is twofold. Lamp market value is expected to have a compound annual growth rate (CAGR) of 31% from 2011-2015. This is due to the extreme differences of LED lamp prices versus incumbent technologies. For example, in the US, a 60W A-lamp incandescent lamp will have an approximate retail price of US$0.50 while its LED replacement lamp will have a retail price over US$20.
The second effect is in shipment units as they are expected to decrease. A-lamp shipments for all technologies are forecast to have a CAGR of negative 11% from 2011-2020.
Regarding the reduction in the units, Smallwood further explained that "The long life of LED lamps (25,000 hours versus 1,000 hours for incandescent) will create a "socket saturation" effect, where each LED installation will effectively decrease the replacement lamp market by one unit. While regional differences due to light preferences and consumer purchasing power will slow down the adoption of LEDs, it is predicted that this overall shrinking pattern will continue through 2020."
