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The Cost of Making Sustainability Affordable June 21, 2010

Filed under: Uncategorized — greensustainablelighting @ 9:15 pm

Right now is an exciting time for the LED industry. Huge companies like Osram Sylvania, Philips, and Lemnis Lighting are developing LED technology at a steady clip. They are falling all over each other to introduce new LED bulbs that boast maximum lumens using minimum wattage. This is a good thing.

Another good thing is that as these companies expand their technology and begin mass-manufacturing, they are able to lower prices. We have already seen significant drops: As recently as 2008, a 100-Watt equivalent dimmable LED bulb sold for about $360. I just did a quick web search which yielded the same product for $150.

Now that LED lamp manufacturers are basically whittling down pennies per lumen, utility companies will be in the position to give away LED bulbs. We can expect to see this happen when they get in the $20 range. This will be a very good thing.

Now, a not-so-good thing: These big lighting companies are in direct competition with each other, so they are cutting margins and lowering prices to gain market share. This is WalMart-style business strategizing: Sell products for less than they’re worth so that people buy from you and not from the mom-and-pop store that is trying to do little more than break even. Bring prices back up after the little guys are forced out of business.

Meanwhile, mergers and acquisitions are going down left and right. Over the past five years Philips has spent over $5.4 billion on snatching up smaller companies like LED specialist Color Kinetics. This is truly a high-stakes business. There are a lot of fascinating developments in the fast-paced world of LED lighting, so while you’re doing your comparison shopping please try to be mindful of the little guys. They need you as much as you need them.

via greentechmedia


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