In the Wild West, U.S. Marshals and the literal cavalry were brought in to clean up the biggest messes on the frontier. The LED market saw something similar, as standards came that made sense of color quality while distributors helped separate the wheat from the chaff in terms of luminaire manufacturers.
After the dust settled, something surprising happened. Companies like Philips and others were no longer in the primary business of making the most common luminaires or the LEDs. They’d moved on to the next town, or in this case the next opportunity. Connected buildings are the new way to establish a foothold in the changing B2B ecosystem and few are looking back.
Started from the Bottom Rung, Now We’re Here
Manufacturers, primarily from China, flooded the market with offerings whose chief benefit was cost effectiveness. Chris Brown, formerly of Weidenbach & Brown, echoed the analysis of others in the industry when he noted that there were significant quality control issues as well as issues regarding consistency of light output and color when dealing with some of these early options.
Distributors like Brown, though, audited the options before they offered them to clients, based on a multi-point process that included testing, warranty and others before they started to worry about the bottom-line cost. It helped them navigate the shootouts between the majors and the upstarts from the East.
Slowly but surely, and for a variety of reasons, things got better. Companies over a broad range of industries looked for Chinese partners who had improved processes, and the benefits carried over to solid-state lighting. Suddenly, the brand name difference had begun to vanish.
Industry Disruption and Standardization
A similar issue arose with organic LEDs (OLEDs). Barry Young, managing director of the OLED Association, noted that unlike conventional LED luminaire manufacturers, there is little value that can be added to an existing OLED system.
The current LED market is not much different. Once products meet current standards, the most common applications in retrofits and new construction are similar enough that it is hard for makers to develop a unique selling proposition. What is left are the controls.
It’s why Brown says that companies like GE, Osram and Philips are placing more of an emphasis on IoT and healthcare. On the former, communications between devices are still a headache because no one has quite agreed on how they should talk to each other. The Big Three are determined to have their own say in the matter and the entities that come out on top will end up having first mover advantage.
Of course, distributors understand the difference between features promised on sell sheets and post-installation. The market is moving so quickly, however, that Brown expects things to shake out in the very near future.
Where the LED Luminaire Makers Are Headed Now
There are “limitless choices, coupled with controls present design opportunities that have lighting evolving similarly to computers and the computer industry,” according to Rick Kennett of Logical Green Solutions.
Kennett and Brown agree that just as the Big Three have moved well beyond the basics of lighting, distributors must also become service providers. Brown noted that before he moved on to his most recent opportunity, the ability to inform a client of a new technology and when it would be useful could be a key point in maintaining a strong relationship with them.
Just like Philips, Osram and GE, distributors can rely on their multi-year contracts with construction management firms and retailers of all sizes. More will benefit by noting the nascent stage of light quality research and systems integration standardization, Brown argues.
When the changes do come, knowing the difference between an eddy and an impending tsunami usually comes down to having watched the waves for years prior.
Tagged with B2B, Connected Lighting