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Frost Tekes Presentation v2-1096
Frost Tekes Presentation v2-1096
Frost Tekes Presentation v2-1096
Presented to
Tekes
June 2015
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%
.
Source: Frost & Sullivan
120,000
100,000
niche markets
80,000
USD million
Fixtures
60,000
40,000
Control gear
Lightsources
20,000
0
2012 2013 2014 2015 2016 2017 2018 2019
units globally
Year
Traditional
(USD m)
LED (USD m)
2014
54,972
27,261
27,261
-13.1%
70,100
16.8%
2019
CAGR (2014-19)
.
Source: Frost & Sullivan
120,000
100,000
USD million
80,000
60,000
40,000
20,000
0
2012 2013 2014 2015 2016 2017 2018 2019
LED
Traditional
80,000.0
45.0
70,000.0
40.0
60,000.0
35.0
30.0
50,000.0
25.0
40,000.0
20.0
30,000.0
15.0
20,000.0
10.0
10,000.0
5.0
0.0
0.0
2012
2013
2014
2015
2016
2017
2018
2019
Revenue
16,939.0 23,936.0 32,285.0 40,070.0 47,303.0 54,361.0 61,854.0 70,100.0
Growth Rate
41.3
34.9
24.1
18.1
14.9
13.8
13.3
Year
Revenue ($ Million)
Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
Market Overview
Market Stage
Growth
Market Revenue
$32,285 M
$12.4
(2014)
Compound
Annual Growth
Rate
16.8%
34.9%
(CAGR, 20142019)
Decreasing
Stable
$70,100 M
(2019)
(2014)
Customer Price
Sensitivity
7
(scale:1 [low] to 10 [high])
Degree of
Technical Change
9
(scale:1 [low] to 10 [high])
Market
Concentration
16.7%
(% of market share held by top
2 companies)
Increasing
Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
Number of
Competitors
5,000
Number of
Companies that
Entered*
30
10
Replacement Rate
(2014)
1522 years
(average period of unit
replacement)
(2014)
Industry Advancement
Average Product
Development
Time
912
months
Decreasing
Stable
Increasing
Average R&D
Spend as a
Percent of Market
Revenue
7.6%
Marketing Spend
as a Percent of
Market Revenue
5.0%
North America:
Incandescent ban
stimulates demand;
utilities rebates
make SSL
affordable.
Asia-Pacific:
China is
embracing
LED and will
lead the
change for the
region.
CAGR
20142019 =
16.8%
Revenue ($ Million)
80,000.0
60,000.0
40,000.0
20,000.0
0.0
2012
2013
2014
2015
2016
2017
2018
2019
Year
North America
Europe
Asia-Pacific
Latin America
Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
80,000.0
60,000.0
40,000.0
20,000.0
0.0
2012
2013
2014
2015
2016
2017
Outdoor
Residential
2018
2019
Year
Architectural
Hospitality
Industrial
Office
Retail
Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
Revenue (%)
80.0
60.0
40.0
20.0
0.0
Direct Sales
Wholesalers/Retail
2011
2012
2013
2014
2015
2016
2017
2018
30.0
70.0
31.2
68.8
33.0
67.0
34.0
66.0
35.0
65.0
34.0
66.0
33.7
66.3
34.2
65.8
Year
*The exhibit represents only the professional lighting end users and not the residential ones
Note: All figures are rounded. The base year is 2014. Source: Frost & Sullivan
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.
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.
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.
Key Trends
Competitive
Landscape
Competitive
Success
Factors
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.
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.
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.
1
Offering Differentiation
2
Selling on Value
3
Refocusing on Total Cost
Ownership
4
Identifying Sector Specific
Routes to Market
5
Selling to Developing
Markets
6
Managing New Entrant
Disruption
18
1
Offering Differentiation
2
Selling on Value
3
Refocusing on Total Cost
Ownership
4
Minimise Client
Operational Risk
Manage/Educate Specifiers
more than End-Users
Selling to Developing
Markets
6
Managing New Entrant
Disruption
19