World LED Lighting Markets (2015 Update) LED Lighting will go Mainstream in 2015 and be a Fully Established Global

Market by 2019

MAA8-19

May 2015

2 MAA8-19

Contents

Section Page

Executive Summary 3

Market Overview 11

Total LED Lighting Market ---

• Drivers and Restraints 22

• Forecasts and Trends 32

• Competitive Analysis 46

LED Lighting Market—A Macro to Micro Analysis 51

North America Breakdown 55

Europe Breakdown 64

Asia-Pacific Breakdown 73

Middle East and Africa Breakdown 82

Latin America Breakdown 90

The Last Word 98

Appendix 101

Return to contents

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Executive Summary

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• The global LED lighting market was worth $32,285 million in 2014, having grown by 34.9%

compared with 2013. It was the second consecutive boom year, confirming the

breakthrough in the key regions of Europe, North America, and China.

• The main drivers for LED lighting came largely on the back of government decisions, such

as bans of inefficient lighting by the European Union, the United States, and Canada, and

the Chinese government’s decision to adopt LED ahead of its planned ban. It was further

supported by initiatives such as the rebates offered by utilities in the United States.

• Government initiatives, however, will play a decreasing role over the forecast period. 2014

brought LED lighting mainstream—awareness is very high, and LED products are available

widely and at different price levels.

• Pricing is key to further adoption, especially in applications less prone to total cost of

ownership (TCO) calculations.

• In 2014, the largest applications for LED were residential, outdoor, architectural, and retail.

Except for architectural, which pioneered LED lighting, the applications have been the

winners of the 2013–14 boom.

• The fastest-growing applications in the 2014–19 period are expected to be industrial, office,

and hospitality. Industrial in particular will grow from a low base, while adoption in the large

office space will increase outside of the headquarters/representative buildings that were

more of the architectural adopters.

Key Findings

Source: Frost & Sullivan

5 MAA8-19

Key Findings (continued)

• The flexibility of LED lighting will provide demand for controls, both in the form of LED

drivers and lighting management systems, offering the full spectrum of personalisation. The

retail sector is increasingly relying on this product integration. Low penetration in the large

residential sector is set to increase over the forecast period.

• Standardisation is a key issue that will need to be solved over the forecast period. The

success of Zhaga products might help with compatibility of products from different

manufacturers. New legal requirements and stronger enforcement of laws and standards

already in place are also expected in key regions. Lighting Europe, the industry

association, periodically calls for more control on noncompliant LED imports from Asia.

• Penetration in large applications will require tailor-made solutions and new products. The

level of research and development (R&D) required is very high, and it is expected that many

lighting companies, especially in the fixture market, will not be able to fund this LED drive

and will leave the market.

• At the same time, new small, local entrants focused on LED solutions and close to their

target customer base will provide a new form of competition to the large, global participants.

• Philips Lighting, Osram, and GE Lighting are all determined to make the most of their LED

know-how, and look at different ways to compensate the disappearance of their

replacement bulbs market component. R&D and new product development have been

limited to LED for years, and by the end of 2014 both Philips and Osram achieved 40% of

their turnover through LED. Source: Frost & Sullivan

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Compound

Annual Growth

Rate

16.8%

(CAGR, 2014–2019)

Market

Concentration

16.7%

(% of market share held by top

2 companies)

Market Engineering Measurements

Market Stage

Growth

Average Price

Per LED

Lightsource

$12.4

Market Size for

Last Year of

Study Period

$70,100 M

(2019)

Customer Price

Sensitivity

7

(scale:1 [low] to 10 [high])

Degree of

Technical

Change

9

(scale:1 [low] to 10 [high])

Market Revenue

$32,285 M

(2014)

Total LED Lighting Market: Market Engineering Measurements, Global, 2014

Base Year

Market Growth

Rate

34.9%

For a tabular version, click here. Stable Increasing Decreasing

Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan

Market Overview

(2014)

7 MAA8-19

Replacement

Rate

15–22 years

(average period of unit

replacement)

Average

Product

Development

Time

9–12

months

Number of

Companies that

Exited*

10

(2014)

Number of

Companies that

Entered*

30

(2014)

Number of

Competitors

5,000

(active market competitors in

2014)

Market Engineering Measurements (continued)

Competitor Overview Total Addressable Market

Industry Advancement

Marketing

Spend as a

Percent of

Market Revenue

5.0%

Average R&D

Spend as a

Percent of

Market Revenue

7.6%

*Note: Companies with revenue of more than $50.0 M Stable Increasing Decreasing

Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan

8 MAA8-19

Executive Summary—CEO’s Perspective

2

LED replacement lamps are already at a

price point that successfully challenge

traditional technologies and will take over

that market completely by 2020.

3

The challenge is to offer noncommoditised

products that make the most of digital LED

light advantages. LED drivers and lighting

management services will be key.

4

The market for luminaires will be particularly

challenged, as LED requires new knowledge

and expensive R&D. Concentration in this

very fragmented market is expected.

5

New markets for services and solution

designs open up, but require good contacts

and customer knowledge, which might favour

local companies above global participants.

1

The LED revolution has happened, driven by

Europe, North America, and China. Further

growth will be less centralised and will

challenge the leading global participants.

Source: Frost & Sullivan

9 MAA8-19

3 Big Predictions

2

The LED revolution will sweep away hundreds of fixture companies that cannot cope with the

new competencies and R&D needed. There is a chance for large LED lightsource

manufacturers to save good, medium-size fixture companies by providing the LED know-how in

return for their help in reaching local customers and winning project-based business together.

3

Lighting as a service (LaaS) on cloud-based networks for efficient and personalised

management of applications will pave the way for connected lighting and living, and better

energy and facility management. Financing, leasing, and maintenance are other service models

that will evolve around LaaS.

1

The LED replacement lamp is the winner in the medium term, as it progressively replaces

traditional technologies around the world. The entire market for replacement lamps (the cash

cow of the top companies) is, however, doomed in the long term as next-generation fixtures will

not have a lamp socket.

Source: Frost & Sullivan

10 MAA8-19

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Source: Frost & Sullivan