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Philips Lights Up LEDs

By Rich Duprey - Apr 12, 2013 at 11:08PM

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Next-generation bulb promises to advance LED technology to new level of brightness.

Normally, you don't think of your lighting choices as an investment, but when the government is handing out $10 million in prizes so companies can develop $60 light bulbs, you better crack open your piggy bank (and break into Fort Knox) if you want to light up your house. 

But last year's L prize winner, Koninklijke Philips Electronics (PHG 0.23%), says it also has the next advance in LED lighting that will be more efficient and slightly more affordable than its oft-ridiculed predecessor. The lighting specialist says it has developed an LED bulb that can produce 200 lumens of light per watt, a threshold that puts it at about double what a typical fluorescent bulb generates. While it will cost slightly more than its fluorescent rival, the total cost of ownership of the bulb will be much less.

Source: Philips.

That's also not a term you typically associate with your lighting needs, but until recently it was one you had to consider when deciding whether to change over to LEDs. Your initial up-front costs were substantial, but the savings over time greatly outweighed the cost. Even Philips' $60 bulb would eventually save you money since it's estimated they'd last for $20 years.

LEDing the way to profits
LED lighting leader Cree (WOLF 7.82%) would likely take exception to Philips touting its work in this field since it previously developed an LED bulb that would reach 200 lumens per watt, though it occurs only under some circumstances. It's also gone the route of producing a bulb that looks more like a traditional light bulb.

Both Philips and Cree have LEDs on the market that retail for around $10 to $15 despite taking different approaches to achieve that relatively affordable price level. Suffice to say that both realize if LEDs are going to gain broad public adoption, their cost will have to come down more while the bulbs themselves need to do more. 

A bright future
Even so, the market researchers at IHS estimate the LED lighting market will advance 40% this year. The time is quickly approaching when the compact fluorescent bulb, which was always seen as something of a transitional technology between traditional incandescent bulbs and highly efficient LEDs, will completely disappear.

The greatest uptake in the technology is coming first in commercial and industrial settings, where businesses with heavy lighting usage will realize the greatest savings in the shortest amount of time. Individual consumers with far more modest lighting needs will see more limited savings that will be stretched over extended periods of time.

Blinded by the light
Philips will be introducing its new 200 lumen bulb in 2015 and expects that within 10 years half the world's fluorescents will be displaced. More importantly, their cost will fall rapidly with their increased efficiency, making them cheaper to own within a year, as opposed to the current three years. Acuity Brands (AYI 1.66%) thinks Philips may still be in the dark about that, believing LEDs will surpass fluorescents in as little as three years' time.

The dim bulbs in Congress may like to pat themselves on the back because they banned the 100-watt incandescent bulb starting last year as a means of hastening the changeover, but the technology was already in the works and the advances seen today in LED lighting are in spite of the government's intervention, not because of it. It's clear, though, that both Philips and Cree are lighting the path forward.

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Stocks Mentioned

Acuity Brands, Inc. Stock Quote
Acuity Brands, Inc.
AYI
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Wolfspeed, Inc. Stock Quote
Wolfspeed, Inc.
WOLF
$75.93 (7.82%) $5.51
Koninklijke Philips N.V. Stock Quote
Koninklijke Philips N.V.
PHG
$25.54 (0.23%) $0.06

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