Why the LED Will Replace the Old Filament Bulbs

LED bulbs were once expensive and not widespread. However, they will become the standard. And this, extremely quickly.

The new economy has accustomed us to extremely fast adoption curves. At least in the computer world. In fact, if an app is downloaded 1 million times in one day, there is no reason that she is not downloaded 300 million times in a week. However, the curve becomes less impressive when adopted things are paying manufactured goods to the longer life expectancy. Yet even in this area, the numbers can be staggering: iPhone sales thus increased from zero at the beginning of 2007 to nearly 75 million in the first quarter of 2015.

Something similar occurs today with the latest generation of light bulbs, light-emitting diodes, also called LED. Indeed, General Electric, who, more than a century ago, put the incandescent light bulb on the market, has just announced that its production of lamps CFL (or CFLs) would be interrupted. Because these bulbs, which have emerged in the 1980s, never really appealed to consumers. And by 2015, thirty years after their introduction on the market, they ‘were only 15% of the sales’ American according to General Electric. The company therefore stops the production of these pale successor to the incandescent light bulb to focus on the next generation of lamps, LEDs, which theĀ Relationshipsplus.com has already sold a few hundred million last year.

Until now, consumers had resisted to the replacement of their old filament bulbs invented by Thomas Edison more than a century ago. They are everywhere. We have all grown up with the type of light they emit. And most importantly, they are incredibly cheap, in large part because the ability acquired by companies over several decades to produce mass. Indeed, the first bulbs made for Edison by Corning in the 1880s were expensive and made one at a time, by hand, usually at the rate of two per minute. It’s only after the invention of the tape machine in 1926, a remarkable tool to produce up to 1,000 units per minute, that they have become the common consumer goods. (I have also co-authored a book about.)

Profitability

Yet, it is true: incandescent bulbs break easily and are little resistant. And they are relatively ineffective insofar as they transform the largest share of energy produced as heat rather than light. It is their price, inefficiency and obsolescence which limited the emergence of competing products. In the 1980s, we thought that CFLs (which last longer and are significantly more efficient in terms of energy) would talk to the rationality of the household. Indeed, if consumers had to pay more to purchase, they had savings in electric consumption and replacement time. CFL sales have never taken off yet. Their high price discourages consumers. It is difficult to see the reduction in energy bills since electricity suppliers detail not consumption per equipment. And their brightness is not great.

Despite new legislation promoting their widespread use, their adoption has remained slow. In 2007, president Bush has yet signed a law defining a stricter for the bulbs efficiency standard. Goal: stop the production of old bulbs incandescent by 2012.

Americans adapt to a new highly efficient technology that will allow them to save money, reduce energy consumption and reduce carbon emissions

But, in parallel with the promotion of CFLs, manufacturers began to market LEDs. Their advantages: they illuminate more quickly than CFLs and offer a closer light than incandescent bulbs, while using 80% of energy less than the latter. The problem, of course, is LED manufacturers were small companies producing a relatively new subject in very small volumes so far. So, the price difference was huge. As General Electric, not later than 2012, these lamps new generation cost between 40 and 50 dollars (between 35 and 45 euros). These companies therefore asked households to pay large sums for unknown products, then to wait seven or eight years to take advantage of their economy.

This is the challenge to which the electronic and computer equipment innovative must always face. The first placed on the market always seem too expensive, elitist and unprofitable compared to existing products. They are produced in small quantities and are therefore neither economies of scale created by mass production, or platforms, processes and machines developed there are several decades enjoyed large operators. That’s why an IBM PC cost 1,565 dollars (1,400 euros) in 1981 (4.080 dollars in today’s dollars, or 3,700 euros), the cars built by Henry Ford in 1903 more that the annual salary of the average American and the first phone marketed mobile, Motorola DynaTach 8000 X, 3,995 dollars (3.590 euros) in 1984.

Popularization

But the same pattern repeats itself when new technologies are becoming popular. When volumes increase, the cost of production per unit decreases, which lowers the price and promotes the demand. The demand attracts new competitors on the market. And when these new players sacrifice their margins to gain market share, prices fall again. Later, when products become more visible and more accessible, they become their own advertising. For example, your great-grandfather who had no car may have decided to buy a Ford Model T after making a turn in its neighbour. Created popularization so more application, resulting in a further increase in volumes and brings even more competitors in the market.

This seems to happen very rapidly, with the LED. As noted by General Electric, LEDs already account for almost 15% of market share and their sales have more than tripled, to reach the 250 million units last year. Therefore, prices have fallen sharply. “Today, an equivalent 60-watt LED lamp is sold at Sam’s Club at 3.33 dollars [3 euro]”, see General Electric. The company foresees that the virtuous circle of increased demand, higher production and lower prices has long days ahead. And within four years General Electric plans that the LED will represent 50% of the market of light bulbs in the United States.

In other words, everything seems to work as expected. The Americans thus adapt to a very effective new technology that will allow them to save money, reduce energy consumption and reduce carbon emissions. And say that a few years ago the members of Congress described the new energy standards of the Bush administration acts of tyranny which violates the rights of consumers.

 

Gallery

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