The LED melee forces industry leaders to "retire" LED additional functions become new highlights

The Guangzhou International Lighting Exhibition opened on June 9. Good news and bad news coexisted at the exhibition. At present, the commercial market of LED industry is booming, but giants such as Philips and Osram are collectively absent from the exhibition. The absence of giants reflects the crux of the domestic LED market—few innovative products and fierce price competition. However, this did not make the world's largest lighting exhibition deserted at all. There were still 2,698 exhibitors on site. "The LED market will go to two extremes in the future. Lamps with only lighting functions will become cheaper and cheaper due to price wars, while innovative products with other functions will become more and more expensive." said Wu Yulin, president of Foshan Lighting Association.

Market expansion underperforms production capacity

We learned from the Guangzhou International Lighting Exhibition that many domestic and foreign giants such as Philips, Osram, NVC, and GE were collectively absent. Sources close to the senior management of the aforementioned lighting giant revealed that these well-known brands combined their experience in participating in the previous six or seven years and believed that the input-output ratio of well-known brands participating in exhibitions is too low; secondly, there are too few innovative products in the lighting field, and participation in the exhibition is of little significance; thirdly, China’s LED industry is too chaotic and price competition is fierce. No matter what new products they launch at the exhibition, you can see similar products with lower prices.”

However, the good news is that the cake of the LED lighting market is still fermenting in 2015, and it can be seen from the exhibition that the increasingly mature commercial LED lighting market has obvious segmentation.

The market is expanding, and upstream light source companies feel it most clearly. “Everyone was testing the waters at the beginning, but now the market has accepted LED, so it will rise even higher in the next two years,” said Yin Li, deputy marketing director of Bridgelux in the United States, in an exclusive interview. Market expansion has brought about the segmentation of the commercial lighting market. At the exhibition site, many booths displayed "fresh food lamps" used in supermarket lighting, and some were even refined to specifically illuminate bread, apples, vegetables, meat, etc.

However, the LED lighting market is extremely fragmented, and no matter how fermented this cake is, it will never be able to outpace the soaring production capacity. Liu Jun, director of Guangya Lighting Research Institute, revealed that the current LED market demand growth rate is between 40% and 50%. It is difficult to estimate corporate production capacity, but it is faster than the market growth rate. Wu Yulin said, "Large companies are taking advantage of economies of scale to continuously compress profit margins, and a large number of small and medium-sized enterprises will go bankrupt."

Innovative products may be exported due to price wars

Visiting the exhibition, we found that among the thousands of booths at the exhibition, there were few truly innovative lighting products. Most of the products focused on display styling and lighting effects. The few eye-catching new products were mainly related to technologies such as visible light communication and intelligent control.

The smart lighting series products with "sensing technology" exhibited by Opple Lighting are a highlight of the exhibition, such as "Adaptive Fresh Lights" and "Feel Control Lights". "Adaptive Fresh Light" can "grab" the color of an object and automatically adjust the light to make the color of the object more full and bright. Wu Yulin analyzed that "fresh food lamps with sensors added will be more than three times more expensive than ordinary fresh food lamps."

Visible light communication (also known as LiFi) adds communication functions to LED lighting. At Bridgelux's booth, three COB light sources (LED core devices) tailored for visible light communications are on display. They carry lights into the communication network and use visible light communications to push information to users. Currently, this technology has been applied in Green Apple Bookstore in the United States. Bridgelux Marketing Director Aaron predicts that visible light communications will be promoted to China in 2016.

However, visible light communications still need to cross a complex threshold to enter the Chinese market. "The domestic intelligent lighting system is not yet mature. We must find partners including software partners, communication protocol parties, technology developers, and lighting designers to complete the transformation of the entire lighting system," Yin Li said. "It can be understood that the car has been repaired, but the highway has not yet been structured."