Market Dynamics- Drivers
The major reason behind rising installation of LED light bulbs is the longer lifespan of LED lighting. LEDs have a longer lifespan, nearly about 100,000 hours, as compared to incandescent bulb with 1000 hours and CFL with 8000 to 10,000 hours lifespan. LEDs can also reduce the labor cost and achieve lower maintenance work due to a longer operational life. Furthermore, LED lighting fixture is far more efficient than conventional incandescent bulbs. It has an efficiency of 80% to 90% as compared to conventional light bulbs with 20% efficiency. LED lights to use around 50% less energy than traditional incandescent and halogen options that are primarily employed for residential and commercial applications. Moreover, use of violet LEDs instead of blue with gallium nitride material offers longer life and greater efficiency. Thus, these factors are expected to drive growth of the market.
Earlier, LEDs were limited to the residential application and some parts of the commercial segment. However, growing concerns related to energy efficiency, quality of lighting, and stringent environmental policies have increased installations LED lightings. Currently, conventional LED lighting fixtures are replacing traditional lighting systems. Moreover, concepts such as smart cities, smart homes, and smart street lighting are creating a demand for LED services. Hence, these factors are expected to propel the global LED services market growth over the forecast period.
Market Dynamics- Restraints
The major restricting factor for adoption of LED lightings is its relatively high initial installation costs as compared to substitute technologies such as CFL. This is due to the fact that LED performance majorly depends upon installation type and fixture. The fixtures need to be installed in such a way that minimum heat is generated by the LED. Any harm to the LED chip by heat can lead to device failure. Therefore, adequate heat sinking is required to maintain longer life of the LED. Moreover, LED installation process in many applications may take a longer time and higher cost since the process includes site survey, designing, consulting, installation, and maintenance. Hence, these factors are expected to hamper the global LED services market growth over the forecast period.
Lack of awareness among populace combined with low quality of LED lightings, especially in emerging regions such as MEA and Asia Pacific is expected to restrict growth of the market. There is still a massive unawareness among consumers in India and China where they prefer incandescent bulbs and CFLs over LED lights. Moreover, there are major issues regarding low quality of LED lighting in MEA region, which is hindering adoption of the same. Thus, these factors are expected to restrain growth of the global LED services market in the near future.
Market Opportunities
Many consumers are preferring LED lighting systems integrated with Wi-Fi, chips, and sensors. These lightings are being preferred in shopping malls, hospitals, offices, and malls. Such devices offer enhanced energy-savings and can monitor the environment in the surrounding with help of software to collect and analyze data. There is constant demand for IoT-enabled LED lighting in smart cities and smart homes. For instance, in 2016, The U.S. Department of Transportation invested US$ 165 million in smart-city solutions. The funds are aimed to ease traffic congestion and improve driver and pedestrian safety. Moreover, in September 2016, Panasonic announced that it is likely to play a key role in setting up the smart residential project ‘Future Living Berlin’ in the Adlersh, a district of Germany’s capital.
The demand for LED lighting solutions has increased significantly in the recent past. This is owing to features such as RGB (red, green, blue) controllability, flexibility, and speed of color control. Previously, conventional lighting required high maintenance cost while RGB code colors are controlled by color film filters and also flexibility and speed of color control are limited. However, LED has overcome these drawbacks and can adapt to new applications. Thousands of LEDs are linked together and still can be controlled individually. This is a significant advantage over conventional lighting solutions. Furthermore, LED strips, outdoor wall fixtures, and LED bulbs are used to light architectural creations to create a uniform lighting, which looks impressive and people get attracted to the same.
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