Lighting industry market reports are often difficult to come by. There are several reasons for this. First, there is no one definitive source for reliable information that captures the global lighting market as a whole. Second, these types of reports are not produced on an annual basis, and usually have a purchase fee that is cost prohibitive for a small company or an individual. When one does finally have the ability to access the material, it is usually out of date by at least two to three years. In the lighting industry, particularly with the rapid infiltration of solid-state lighting, that is practically a lifetime. But thanks to some recently released reports, understanding the makeup of the lighting market is becoming more attainable.
The most significant of these reports is from McKinsey & Company, and was commissioned by Osram. Lighting the Way: Perspectives on the Global Lighting Market, takes a broad view of the industry with particular reference to LED market share—present and future. The report's information is sourced from data collected by McKinsey in June 2011 when they surveyed lighting professionals and consumers in the United States, Germany, Japan, China, Russia, Brazil, and India. Feedback was provided by more than 650 respondents representing the design sector and more than 1,000 respondents representing lighting products consumers. The report is divided into three sections: an overview of the global lighting market, an examination of the impact of LEDs on lighting, and an examination of specific lighting areas and the penetration of LED market share.
Overall, the report indicates that the global lighting market will reach revenues of approximately €110 billion ($154 billion) by 2020. Contributing to this growth are population increases, urbanization, government regulations, and energy efficiency measures. At present, LED technology remains too expensive to be competitive from an application standpoint. However, accelerated growth over the next decade will change that. With continued investment, it is anticipated that LED costs will decrease at a rate of 30 percent per annum. The McKinsey report suggests that "the LED lighting market will amount to almost €65 billion ($91 billion) by 2020—close to 60 percent of the overall lighting market."
The report goes on to look at the three main sectors of the lighting market: general lighting, automotive lighting, and backlighting. Backlighting is expected to decline by 2020 as the increase in high-brightness LEDs will require fewer LEDs to be used for this type of application. Automotive lighting is expected to see continued growth thanks to the LED conversion of headlamps.
But it is general lighting, which accounts for 75 percent of the total lighting market, that will see the greatest transformation due to LEDs. Architectural lighting applications in particular, viewed as an area of early adoption because of the incorporation of color control, will see an 85 percent market share by 2020.
In evaluating current and future LED market share, the McKinsey report notes that, because of the complexity and fragmentation of the lighting industry, it is important to assess not just applications, but lighting and lamp technologies, geographical location, and end-market structure. With these four factors in mind, it is easy to see why LEDs are transforming the lighting industry and the entire value chain. A copy of the McKinsey report can be found at archlighting.com.