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Views from the Tipping Point 
Views from the Tipping Point
The on/off era chapter of our industry is coming to an end, setting the stage for a new era of possibilities in lighting innovation.
Jes Munk Hansen, President and CEO of OSRAM SYLVANIA, CEO of OSRAM Americas
November 18, 2014
 
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This article was originally published in the Edison Report on November 17, 2014. The full text can be found here.

The on/off era chapter of our industry is coming to an end, setting the stage for a new era of possibilities in lighting innovation. Light bulbs and switches have historically represented the way most people think about lighting until today - as a basic function, a mechanical tool that we use to light up a space. However, the reality of today is that lighting isn’t just functional anymore. It is taking on an entirely new dimension in our lives.

Today, we are just at the beginning of a transformation of a magnitude that we could not fully grasp even five years ago.  In order to turn these possibilities into reality, we must think beyond the relentless pursuit of energy efficiency that has driven our business for several decades.  In the past ten years, improvements in LED lighting technology, controls and sensors have enabled us to achieve incredible energy efficiency levels.  However, it is now time to be honest about the reality of diminishing returns.  Energy efficiency has become a commodity and the future of solid state lighting (SSL) depends on all of us to think much bigger.  Tunable color is of course one such added value to SSL, but that feature will fast become a commodity too. Light is gaining intelligence.  We need to start thinking about what greater value light can offer when we mold it into our world and our lives.

As we continue to introduce a broader portfolio of LED lighting choices and innovative technology to the market, adoption of these products will accelerate much faster.  The light quality of LED lamps has reached a point where these products have become a real alternative for consumers.  Consumers are becoming better educated on lighting choices and are more comfortable with the LED technologies of today whether it is about light quality, application, or price.  These realizations are visible in the shifting from traditional to solid state lighting technologies.  Consequently, as the demand for LEDs continues to increase, prices will continue to decline, further boosting market acceptance. 

Conversely, as the demand for traditional products goes down, producers of these classic products have to dramatically reduce their global production footprint, causing prices to go up.  Traditional products are becoming increasingly expensive for the entire value chain to handle, and what once used to be daily consumables become costly options for the consumer, which further accelerates the tipping point.  This is the law of basic economics that is further accelerating the tipping point just as we’ve seen in other industries experiencing similar technology shifts. 

This seesaw effect creates exciting growth opportunities for LEDs, along with new challenges in the traditional business that must be met to ensure consumers have the choices to meet their needs. As rapid and ongoing change impacts our lighting community, these dynamics in the market continue to play out and even accelerate.  We should be proud of our ability to adapt within our industry.  Above all, one thing remains clear, the future of lighting is a bright one and we are certainly tipping in a positive direction.