LED lamps poised to topple long-time incumbent incandescents

Originally fueled by environmental concerns and the steadily rising cost of electricity, regulations that will restrict the sale of most incandescent bulbs in North America, Europe, and Asia have accelerated the market for energy-efficient lighting. Over the next few years, SSL (solid-state lighting), CFL (compact fluorescent lighting), and other energy-saving technologies will replace billions of light sockets currently occupied by inefficient, filament-based bulbs. In combination with rapidly falling prices, research analyst firm McKinsey & Company predicts that the LED market segment will grow to one billion units by 2015 (Reference 1). The Three Cs Challenge The application of any SSL lamp must address several technical challenges before its successful adoption into the mainstream. The most immediate obstacles to mass-market acceptance are the three Cs: cost, color quality, and compatibility. Cost is the central issue impeding SSL adoption. In the near term, as SSL bulbs enter the high-volume consumer market, the natural economies of scale should bring per unit retail prices down into a more palatable range of $10 to $15 USD. Like most developing technologies, these prices should continue on a downward trend to the $5 to $7 range by 2015. The challenge posed by color quality improvements actually represents a significant opportunity for SSL technology, given that consumers are largely dissatisfied with the color emitting performance of existing CFLs. Improved color quality is a fundamental advantage for LEDs due to their more uniform optical characteristics. As a result, SSL products can more closely replicate the user experience of incandescent lighting by simultaneously delivering a warm color temperature with high CRI (color rendering index). To address the third challenge of compatibility, SSL products must be near 100 percent compatible with the installed base of dimmers found within many of today's residential and commercial lighting systems. Dimmer compatibility is rare with today's CFLs, so the opportunity for SSL products to achieve a significant differentiating benefit is paramount. While cost reduction will be a direct result of growing economies of scale, and improved color quality is a fundamental advantage of LEDs, dimmer compatibility improvements will only come through focused attention and innovation. The Dimmer Compatibility Challenge All aspects of the Three Cs challenge are essential to solid-state lighting's quest for mainstream consumer acceptance. Compatibility, however, looms large as the critical variable, given that the starting purchase price of SSL products is considerably higher than incumbent lighting products. With higher per-unit retail costs, customers have similarly high expectations of SSL's overall performance. Many SSL products currently on the market use analog LED driver ICs that claim to "work with some dimmers," resulting in unacceptable return rates for both retailers and manufacturers. While the LED lamps available on the market today can demonstrate 50% to 60% compatibility, in the high-volume consumer market, even a 5% return rate cuts deeply into manufacturer and retailer profit margins and can damage a manufacturer's reputation and brand image. In addition, customer returns drive customer dissatisfaction and will severely limit the entire SSL industry's chances for rapid market acceptance. www.cirrus.com References: 1. "Lighting the Way: Perspectives on the global lighting market," McKinsey & Company, 2011