LED Bulb market and Price Forecasting

LED Market Size

The LED bulb market size is already massive. It is difficult to quantify exactly because there are many LED’s fitted as part of integrated appliances but in broad terms the LED market as of December 2010 is around 13 billion GBP . The LED bulbs primary use is as a replacement for less efficient bulb types like the CFL, Halogen and the traditional incandescent bulb, listed in descending order of efficiency. The rate of penetration into this market place is the primary factor which the governs how large the LED market is. As of December 2010 the market penetration was reported at 3.2% which is still only of very small fraction of the total potential.

LED Bulbs  Market Penetration

Now at present it would not be possible to replace all other bulb types with LED bulbs primarily because the LED technology is not advanced enough as yet to replace the high powered light bulbs. Realistically the most powerful LED bulbs which are available at a commercially viable price are around 5 watts for a single high powered unit, however it is possible to utilise an array of smaller LED’s to produce larger lights, for instance, LED fluorescent tube replacements. The rate of penetration is dependent on 4 main factors:-

1. How far the LED technology has advanced to allow them to  replace all conventional light bulbs, particularly with respect to the wattage output.

2. The price of the LED bulbs which governs whether it is commercially sensible to replace other technology bulbs. The cost benefit equation for replacing incandescent bulbs is very compelling but the commercial advantage of replacing fluorescent tube lighting with LED tubes is no where near so strong.

3. The lumens  per watt output that can be can be created from LED bulbs. Current technology allow for around 140lm/ watt in 2010 but the forecast for 2020 is for 240 lm/ watt to be achievable.

4. Environmental pressure and the impact of the incandescent light bulb ban

Taking these 4 factors into consideration the analysts forecast is that the penetration of the market will increase from 3.2% to 12.5% by the year 2013. Taking the 100% penetration potential market size as 400 billion GBP this then represents an increase in total sales to 50 billion GBP by the year 2013. This is a phenomenal growth and the major LED manufacturers for instance Philips, Osram and Cree are gearing up production to meet this opportunity.

LED Bulb Price Predictions

The other key aspect from a consume perspective is how much LED bulbs will cost in the future. We have already seen quite a large decrease in price. A 3watt LED candle bulb which would retail at £20 in 2007 would typically retail at £10 in 2010. Analysts predict that although we are not likely to see the continuation this rate price reduction we are likely to see a reduction in price of around 15-20% per year. If you then compound this cost reduction with the improvements in light output levels and reliability then the LED bulb will become increasingly more attractive from a consumer perspective. With these commercial and technological statistics combined with the environmental pressures now being placed on the consumer one thing is for sure.  The LED bulb is here to stay.