2
Year/USD bn Lightsources Control Gear Fixtures
2014 24.4 7.9 55.0
2020 25.7 11.2 60.5
CAGR (2014-20) 1.0% 7.4% 1.9%
Global Lighting Market: Historical and Forecast Mar ket Size by Segment, 2014 & 2020
Total Lighting Market, including TraditionalControl Gear is the Fastest Growing Segment
• Control gear to gain a pivotal role with the
rise of LED due to the long term increase on
functionality
• The possibilities that LED offers will give
rise to increasingly complex control gear
giving comfort, security and flexibility to
lighting that has thus far only been seen in
niche markets
• The average price of control gear is
expected to rise notably in Europe and North
America by 2019 on top of the increase in
units globally
US
D m
illio
n
. Source: Frost & Sullivan
0
20,000
40,000
60,000
80,000
100,000
120,000
2012 2013 2014 2015 2016 2017 2018 2019
Fixtures
Control gear
Lightsources
0
20,000
40,000
60,000
80,000
100,000
120,000
2012 2013 2014 2015 2016 2017 2018 2019
LED
Traditional
3
Global Lighting Market: Historical and Forecast Mar ket Size by Segment, 2014 & 2019
Year
Traditional
(USD m) LED (USD m)
2014 54,972 27,261
2019 27,261 70,100
CAGR (2014-19) -13.1% 16.8%
Lighting Industry and MarketsThe LED revolution is happening now – 40% of the market in value in 2015
• 2013 and 2014 have been the
breakthrough years for LED in the
professional market, in Europe, North
America and China. The other green
technologies are on the way out
• 2014 has seen significant inroads for
LED in the large residential market,
which will help LED to pass 40%
penetration of total lighting sales in
2015 U
SD
mill
ion
. Source: Frost & Sullivan
Global LED Lighting MarketRevenue Forecast
Key Takeaway: the 2014 boom was driven by Europe, North America and China across applications; LED
replacement bulbs made significant progress in the Residential application worldwide
Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
Total LED Lighting Market: Revenue Forecast, Global, 2012-2019
CAGR, 2014–2019 = 16.8%
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
0.0
10,000.0
20,000.0
30,000.0
40,000.0
50,000.0
60,000.0
70,000.0
80,000.0
2012 2013 2014 2015 2016 2017 2018 2019Revenue 16,939.0 23,936.0 32,285.0 40,070.0 47,303.0 54,361.0 61,854.0 70,100.0Growth Rate - 41.3 34.9 24.1 18.1 14.9 13.8 13.3
Gro
wth
Rat
e (%
)
Rev
enue
($
Mill
ion)
Year
Compound
Annual Growth
Rate
16.8%
(CAGR, 2014–2019)
Market
Concentration
16.7%
(% of market share held by top 2 companies)
Global LED Lighting MarketKey Figures (1/2)
Market Stage
Growth
Average Price Per
LED Lightsource
$12.4
Market Size for
Last Year of Study
Period
$70,100 M
(2019)
Customer Price
Sensitivity
7
(scale:1 [low] to 10 [high])
Degree of
Technical Change
9
(scale:1 [low] to 10 [high])
Market Revenue
$32,285 M
(2014)
Total LED Lighting Market: Market Engineering Measu rements, Global, 2014
Base Year Market
Growth Rate
34.9%
Stable IncreasingDecreasingNote: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
Market Overview
(2014)
Replacement Rate
15–22 years
(average period of unit replacement)
Average Product
Development
Time
9–12
months
Number of
Companies that
Exited*
10
(2014)
Number of
Companies that
Entered*
30
(2014)
Number of
Competitors
5,000
(active market competitors in 2014)
Global LED Lighting MarketKey Figures (2/2)
Competitor Overview Total Addressable Market
Industry Advancement
Marketing Spend
as a Percent of
Market Revenue
5.0%
Average R&D
Spend as a
Percent of Market
Revenue
7.6%
*Note: Companies with revenue of more than $50.0 M Stable IncreasingDecreasingNote: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
Source: Frost & Sullivan
Global LED Lighting MarketEurope and North America to mature first; higher growth rates during the forecast period in younger markets
North America: Incandescent ban stimulates demand; utilities rebates make SSL affordable.
Europe: The implemented EU ban on incandescent and the prospective ban on halogen drive LED adoption in the region.
Asia-Pacific: China is embracing LED and will lead the change for the region.
Middle East and Africa: Growth expected in the second half of the forecast period, thanks to a sharp price decline.
Latin America: Price is the key barrier to adoption outside of high-end projects. LED will increasingly be able to challenge CFL.
CAGR 2014–2019 = 15.2%
CAGR 2014–2019 = 17.2%
CAGR 2014–2019 =
16.8%
CAGR 2014–2019 = 18.4%CAGR 2014–2019 = 23.1%
Global LED Lighting MarketRevenue Forecast by Region
Key Takeaway: APAC is confirmed the key area, especially outside of China in the long term
Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
Total LED Lighting Market: Revenue Forecast by Region, Global, 2012-2019
CAGR, 2014–2019 = 16.8%
0.0
20,000.0
40,000.0
60,000.0
80,000.0
2012 2013 2014 2015 2016 2017 2018 2019
Rev
enue
($
Mill
ion)
Year
North America Europe Asia-Pacific Middle East & Africa Latin America
Global LED Lighting MarketRevenue Forecast by Application
Key Takeaway: Office and Industry will be the highest growth applications; Residential will be the largest
application by far by 2019
Key Takeaway: Office and Industry will be the highest growth applications; Residential will be the largest
application by far by 2019
Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
Total LED Lighting Market: Revenue Forecast by Application, Global, 2012-2019
CAGR, 2014–2019 = 16.8%
0.0
20,000.0
40,000.0
60,000.0
80,000.0
2012 2013 2014 2015 2016 2017 2018 2019
Rev
enue
($
Mill
ion)
Year
Architectural Hospitality Industrial Office Outdoor Residential Retail
Global LED Lighting MarketPercent Revenue Forecast by Distribution Channel
Key Takeaway: Wholesalers and retail have dominated the nascent stages of LED, and are now losing to direct sales
and project based solutions; however, indirect sales will grow as more standard products become available
0.0
20.0
40.0
60.0
80.0
100.0
2011 2012 2013 2014 2015 2016 2017 2018
Direct Sales 30.0 31.2 33.0 34.0 35.0 34.0 33.7 34.2
Wholesalers/Retail 70.0 68.8 67.0 66.0 65.0 66.0 66.3 65.8
Re
ve
nu
e (
%)
Year
Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
Total LED Lighting Market: Percent Revenue* Forecast by Distribution Channel, Global, 2012-2019
*The exhibit represents only the professional lighting end users and not the residential ones
Global LED Lighting MarketKey Messages
2
LED replacement lamps are already at a price
point that successfully challenge traditional
technologies and will take over that market
completely by 2020.
3
The challenge is to offer noncommoditised
products that make the most of digital LED light
advantages. LED drivers and lighting
management services will be key.
4
The market for luminaires will be particularly
challenged, as LED requires new knowledge and
expensive R&D. Concentration in this very
fragmented market is expected.
5
New markets for services and solution designs
open up, but require good contacts and
customer knowledge, which might favour local
companies above global participants.
1
The LED revolution has happened, driven by
Europe, North America, and China. Further
growth will be less centralised and will challenge
the leading global participants.
Source: Frost & Sullivan
Global LED Lighting MarketWhat next? 3 Big Predictions
Source: Frost & Sullivan
2
The LED revolution will sweep away hundreds of fixture companies that cannot cope with the new
competencies and R&D needed. There is a chance for large LED lightsource manufacturers to save
good, medium-size fixture companies by providing the LED know-how in return for their help in
reaching local customers and winning project-based business together.
3
Lighting as a service (LaaS) on cloud-based networks for efficient and personalised management of
applications will pave the way for connected lighting and living, and better energy and facility
management. Financing, leasing, and maintenance are other service models that will evolve around
LaaS.
1
The LED replacement lamp is the winner in the medium term, as it progressively replaces traditional
technologies around the world. The entire market for replacement lamps (the cash cow of the top
companies) is, however, doomed in the long term as next-generation fixtures will not have a lamp
socket.
Key Key Takeaway: Offices to focus on energy saving aspects, residential to focus on ambience
Global LED MarketWhat next? Leveraging Lighting Management Systems to target verticals
Global LED Lighting MarketWhat next? Services. Smart buildings, performance contracting and light-as-a-service are key trends driving future growth
Key Trends
• Smart buildings, representing the convergence of green and smart technology trends, will become increasingly important and a driver for consultancy based services.
• Performance contracting is increasingly becoming a mainstay of the market; end users are keen to maximise cost savings and improve efficiency.
• Light-as-a-service (essentially leasing-type models and ‘pay-as-you-use’ services) is a concept that is gaining traction in the industry through its ability to enable businesses to minimise upfront capital expenditure.
Competitive Landscape
• The increasing importance and value of lighting projects is attracting ever greater competition within the sector.
• BMS & FM companies are both actively targeting the sector.
Competitive Success Factors
• Market participants need to be able to work in partnership with BMS companies, and need to be able to work with not just light but also HVAC etc. With strong growth forecast, establishing a market presence, a network of connections, and customer relationships will be vital for future success. Supplies want to establish an entrenched position.
• With performance contracting becoming the customers’ preferred business model, suppliers will need to develop service capabilities, or partner with facility management companies, or energy service providers, to participate in the most dynamic part of the market.
Global LED Lighting MarketWhat next? Services. Smart buildings to drive data-based consultancy services
�Smart buildings will become a mainstream reality, driven by the convergence of green and smart technology and new market entrants.
�Cloud-based services with a strong focus on data interpretation will be key enablers for a new generation of intelligent buildings.
� If lighting services companies manage to make a space for themselves in the data analytics market, consulting contracts could potentially include very different new services -data based services
Global LED Lighting MarketPerformance contracting to become preferred business model
�Performance contracting will become customers’ preferred business model and suppliers will need to develop service capabilities or partner with facility management companies or energy service providers to participate in the most dynamic part of the market.
�EU energy savings contract and performance contracting to grow at CAGR12-18 8.2% to reach €7,375.0 million by 2018.
Global LED Lighting MarketLight-as-a-service (LAAS)
�Future trends in terms of business models include leasing-type models and ‘pay-as-you-use’ services.
�The concept of light-as-a-service is expected by most market participants to pick-up as a service offering in the future . Key advantages for the end-customer is the ability to use new technology, increase comfort levels, and bringing related energy savings, whilst taking away the up-front weight on the balance sheet of customers.
�Where budgeting is a barrier for upgrades/retrofit, lease-type services will strive . Uptake is expected to be faster in the industrial and public sectors.
�X-as-a-service proposition is developing in adjacent and unrelated markets, and is proving a success story. It would be interesting to study how quickly this type of services have picked up in other markets (penetration rate), to understand typical conditions for success, and learn from these other industries.
� As reference, in the European passenger vehicle market, one of the oldest leasing markets, the share of leased cars was 19% in 2011 and will grow to 23% by 2018.
18
Lighting Industry and MarketsKey Challenges for 2015
Offering Differentiation
Selling on Value
Refocusing on Total Cost
Ownership
Identifying Sector Specific
Routes to Market
Selling to Developing
Markets
Managing New Entrant
Disruption
1
2
3
4
5
6
Moving away from cost-based competition
Moving the core business from wholesale to services
Supporting a client’s longer term vision in line with product design
benefits
Finding the best resource allocation model for a specific target
market
Correctly identifying and benchmarking the competitive landscape
Innovating to maintain a technical advantage
Description and Context
19
Lighting Industry and MarketsChallenges to Insights
Offering Differentiation
Selling on Value
Refocusing on Total Cost
Ownership
Identifying Sector Specific
Routes to Market
Selling to Developing
Markets
Managing New Entrant
Disruption
1
2
3
4
5
6
Moving away from cost-based
competition
Moving the core business from
wholesale to services
Supporting a client’s longer term
vision in line with product design
benefits
Finding the best resource
allocation model for a specific
target market
Correctly identifying and
benchmarking the competitive
landscape
Innovating to maintain a technical
advantage
Insight
Integrate Upstream Client
Decision Making
Minimise Client
Operational Risk
Provide Light Solution
Leasing
Manage/Educate Specifiers
more than End-Users
Develop Better Market
Segment Models
Leverage Total Solutions
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