The kick off of a new year is a traditional time for commentators to either
reflect on the past, or prognosticate the future. I’ve always enjoyed the latter,
since so far, I’ve never found myself to have made a mistake in the future,
only the past. Given the panic nature of the headline, I’ll be quick to point
out that this is not about a slowdown or end to LED lighting, or the supply
chain that feeds it. Far from that. What we’re talking about here is the beginning
of a phase that will culminate some years from now with the term “LED lighting
company” simply being irrelevant.

This shouldn’t come as a surprise to anyone, although it can certainly run
head-on to the paradigms held by some existing LED lighting companies that the
simple existence of superior (and even cost-effective) technology is sufficient
to launch them to the forefront of this burgeoning sector. Those companies,
some of which are very well resourced and run by sharp technology-oriented leadership,
are in the process of discovering that great technology is only part of the
equation, and that they keep running into an obstacle that we can simply call
“the lighting market.” As willing as that market is to accept a good
technology, it hasn’t created a “new” market in the way PCs, cell
phones or opto-communications did. The LED revolution generally leans more towards
the model of having infused an industry with something revolutionary, but not
creating a revolutionary industry. An example might be something along the lines
of introducing fuel injection and computer controls to the automotive industry.
The result there has been a radical revolution in the ability to control the
combustion within an automobile’s engine, and once we started throwing microprocessors
in there, we control everything else within the sheetmetal envelope to a degree
that was unimaginable when cars went “mainstream” back in the earlier part of the
1900s. Seriously…. 200K+ mile useful lifetimes, impressive fuel economy, unprecedented
comfort, mind-boggling traction and braking control systems, self-parking systems
(haven’t asked if you can use those on the driver tests), internet connectivity
and voice control. In a sense, beyond the core physical configuration, it changed
pretty much everything about how a car operates and interacts with its driver,
in much the same way that LED lighting is going to change pretty much everything
about how lighting interacts with the world and users around it.

With that said, how many “new” car companies rose into existence
as a result of microprocessors and fuel injection, and how many of the existing
ones disappeared because they failed to adapt? Pretty close to none. Now that
LED lighting is achieving credible payback times, and outright cost-parity with
existing technologies in more and more cases, I expect close to the same “no
new players” result for the upper tier of the lighting industry, although
at least one company (Cree) is making a pretty credible play at climbing into
Tier I. (Granted that in their case it can be a lively discussion concerning where to mark
their starting point, given the Ruud acquisition.) Given how many mid- and lower-tier
companies the lighting industry has been able to support, I think it reasonable
to expect that we will have new arrivals from the ranks of the LED pure-plays,
and some departures from those that fail to cost-effectively move their lines over to LED technology, but all
in all, the market make up will look pretty much the same as where it started
this new millennium. No doubt the story will be somewhat muddled, as the history
of the lighting majors is to absorb threatening/complimentary up and comers
before they get too far in their climb, so it will be easy to pontificate on
the “what ifs” concerning those that made a leap then got gobbled up.

So where is the coming irrelevancy of “LED lighting company”? One
need look no further than to see if you can find segments of the lighting industry
called “incandescent lighting companies”, or “fluorescent lighting
companies” or even “metal-halide lighting companies”. They’re
just lighting companies. We won’t even have “smart lighting companies”,
as you’ll either incorporate that innovation or cease to exist just as any PC
company that stuck with floppy disks would have. So LED lighting companies,
here’s your notice: Time to grow up into being a “real” lighting company
in the general “lighting market” or expect to disappear into the swamp
while your IP bubbles up into the arms of those happy to harvest it. 2013 is
the beginning of the end, but not a bad one, by any means.