LED Lighting for the Masses

By Michael Kanellos

Last year at Ceatec, the giant Japanese electronics fair, Toshiba (TOSBF.PK) showed off its new line of LED light bulbs. The 60-watt equivalent cost about $90 and the 100-watt equivalent, that could also be dimmed, ran around $360. Granted, the bulbs consumed 1/10th of the power of regular bulbs, but the prices looked difficult to swallow.

This year at the show, Panasonic (PC) showed off a 60-watt equivalent bulb with dimming that will cost 4,000 to 5,000 yen (about $44 to $55) when it comes out. It consumes 6.2 watts and lasts 40,000 hours. Sharp (SHCAY.PK) has a similar bulb, and the light quality is good.

So why the price whack? Electronics regularly drop in price at a rapid rate, but a drop like this is somewhat rare. Volume manufacturing can explain some of it, but there are also other reasons afoot.

One, governments are phasing out incandescents. Australia bans them in 2010 and Europe will phase them out from 2010 to 2012. The U.S. has adopted efficiency regulations that will lead to the demise of incandescents. The Edison bulb celebrates its 130th anniversary on December 31st, making it one of the longest-running and last vestiges of vacuum tube technology.

Second, competition. Small start-ups like Lemnis Lighting and Green Ray have started to market cheap LED bulbs for around $40 to $50. Last week I asked Lemnis CEO Warner Philips (the great-grandson of the guy who founded Philips Lighting) how a tiny manufacturer could undercut industrial giants. He said that, along with some techincal nuances, maybe Lemnis is willing to accept lower margins.

Lemnis and others are also looking at leases and layaway plans to make the price even more palatable. Ideally, the lease price will be less than the energy saved. The lease would also only run three or so years, but consumers would keep the bulb.

So there you have it. Get that light socket ready.

Comments

[AirBoss:]

Can you say "CREE"? I knew you could...

Oct 09 08:44 AM

[Dave Marsh:]

Thank goodness for competition. Remember the Pulsar watch? It had a red LED display and cost $250. Now LCD watches are a few dollars. More recently, the first LED laser pointers were $200, now they are keychain novelties, and even green LED lasers, which used to cost $150 only 3 or 4 years ago, can be had online for $30 (e.g. Buy.com). The same will happen with these, only more rapidly. Continuous under-cutting will rapidly lay waste to the the ridiculous margins, and price them with a commodity-type margin as companies scale up production in the space of two or three years. Since most CFLs can't be dimmed, they will coexist for some time in the overhead "full-on" lighting market. LEDs will take hold first because of the dimmer ability, then become ubiquitous as the prices plummet.

Oct 09 09:04 AM

[La Marque:]

Most of this appears as hype. The LED bulbs that I have seen do not have the maximum lumen output of incandescents or the proper color characteristics or dispersion. The lifespan may be cut short just by one or two of the LEDs quitting.

CFLs with 850 lumens at 13 watts are what the LED bulb makers are going to have to match or exceed and undercut the price.

Oct 09 09:35 AM

[jerrydd:]

On Oct 09 09:35 AM La Marque wrote:

> Most of this appears as hype. The LED bulbs that I have seen do not
> have the maximum lumen output of incandescents or the proper color
> characteristics or dispersion. The lifespan may be cut short just
> by one or two of the LEDs quitting.
>
> CFLs with 850 lumens at 13 watts are what the LED bulb makers are
> going to have to match or exceed and undercut the price.


I agree that LED's are not as great as they say and for equal ight, CFL's are as eff. While LED's deserve a small premium, it's only 30-50% which means LED's for the same light need to be under $8 for a 100wt equivalent bulb. That's just not going to happen anytime soon.

Oct 09 09:48 AM

[Butch:]

Cree today announced that they will be hiring 575 new employees to meet demand for LEDs for light modules for Chinese streetlights and other uses.
www.newsobserver.com/n...

Oct 09 12:23 PM