Leading lighting analyst Jed Dorsheimer says the sector is at a crucial junction – and must rapidly embrace change if it is to survive with historic levels of profitability.
‘Things are not okay in this industry,’ said Dorsheimer. ‘They’re ugly.’
He said the traditional lighting business was ‘going the way of the dinosaurs’ as the elimination of the replacement market and the rapid commodification of LEDs drove down prices. It was becoming increasingly difficult for investors to see good returns.
Dorsheimer – named as one of the 10 most influential people in lighting – warned an audience at the Strategies in Light conference in Santa Clara, California today that ‘the first step to fixing a problem is admitting that you have one.’
‘We are at a crucial time in this industry. We need to consider how we can change it not just practically, but philosophically.’
‘The cheaper-lumens business model doesn’t work. Niches do.’ He pointed to applications in building management, visible light communication, horticulture and water purification as niches in which good margins could be made.
‘Instead of trying to get two per cent of the general lighting market you are better off trying to get a bigger percentage of a niche market.’
Dorsheimer, who works for Acuity Lighting and is an advisor to many big-brand lighting manufacturers, cited Dialight’s success in oil rigs and Digital Lumens' experience in refrigerated applications as examples.
He said an exception was, whose business model was very successful in the current conditions.
Dorsheimer believes control is one area in which profitability could be good if the value-proposition was made to the right people. ‘Smart lighting is not as far-fetched as you may think’.
He challenged his audience to think differently about what the future of the lighting industry could look like. ‘The future of lighting is experiential. You need to create an experience. As humans we have an instant reaction to spaces that are different, even if we can’t articulate what exactly is different.’
- You can hear Jed Dorsheimer speak in a rare and exclusive interview during our next Lux webinar. Dorsheimer, who has been named as ‘one of the most influential people in the lighting industry’ will offer his recipe for how to be successful in the lighting world, despite the disruption wrought by the LED and IoT revolutions. You can find out more and register to listen by clicking here.
See the Lux interview with the Acuity Lighting management team:
Video editor: Jack Everitt