TED KONNERTH, PHD

PRESIDENT/CEO

THE FUTURE OF LIGHTING

AND OTHER BITS OF HYPERBOLE

Lighting Guy

Industry Observer and Active Participant

Talent assessment => Industry leaders

Past Observations

Future predictions

Winners/Losers

Channel Conflicts◦ Distributors too slow

◦ Contractors resistant

◦ Legacy Manufacturers in denial

Channel profits◦ Pyramid of profits

◦ Future profitability

Channel updates◦ Some movement

◦ Barely moving

◦ Mixed performance, but a lot more talk; adoption

Profitability update◦ Pyramid intact by

market

◦ Future is progressive decline

Emerging trends◦ Leased lighting

◦ Franchised distributors

◦ ESCO emergence

◦ Electronic distributors

◦ Channel consolidation

Trends updates◦ Growing, slowly

◦ Growing

◦ Growing

◦ Growing

◦ Components only

◦ hmmmm

4 Clear divisions have formed:

Bulbs Components Modules Fixtures

LSG Die Xicato Cree

Philips Phosphors Bridgelux Big 4 Legacy

MSI Heat Sinks Terralux Outdoor guys

GE Power supplies OptoElectronix Specialty Guys

Lamp replacement

DC Power distribution

Building system integration

Design

New markets

Consolidation => Re-invention

=> “Power Ball”

=> Gaining traction

=> Darwinian

=> Hello?

=> Blue Ocean

Lamp Replacement

4+ pound retrofits inside 20-yr old Edison sockets isn‟t a strategy, nor safe

T-8 replacements in existing ballasted equipment with 20-yr old „tombstone‟ sockets is changing bad lighting into worse lighting

Prediction: Lighting will cease to pierce the plane of the ceiling

DC Power Distribution

Phase 1: home-runs to step-down transformers

Phase 2: Off-grid building design with native DC power

Prediction: Residential design will use solar power to drive all lighting, sound, desk-top and security in native DC; off-grid.

Commercial market will follow.

Building system integration

Design will be collaborative across electrical, data/com, lighting, security, sound and HVAC

Lighting construction will migrate to low-voltage integrators and software-centric commissioning engineers

Prediction: Smart building design will enable a new building system approach: Lighting, HVAC, Desk-top, Security, Sound, etc. Software controlled.

Design

Current: legacy guys are using their same designs and tooling. LED guys: copy them

2X2, Troffer, Shoebox, Cone of Light, Type 2, Luminaire dirt depreciation, etc. EXTINCT!

Prediction: LED guys will learn „lighting‟ and legacy guys will learn LED. Quality Lighting and Quality Design will intersect into a holistic smart building Gestalt.

New Markets

Commercial market is ripe for innovation Specialty applications: color, behavioral control,

horticulture, agriculture, etc. Blue Ocean strategy: where has light not been

before? What else can lighting „nodes‟ enable? Prediction: we will stop talking about „adoption‟,

and LED will simply become one part of an overall system, called:

“lighting”

Channel consolidation

New wave of upstart LED entrants will experience Darwinian economics

Legacy lighting manufacturers will remain in their legacy new construction markets

LED guys will control end-user markets

Prediction: The US lighting market will bifurcate: New Market v. Installed Market

Design firms will change and morph into low-voltage/electronic/software consultancy

IES will remain relevant, but will change and possibly merge with ASHRAE

LED warranties will shorten to 1 year, due to the market dynamics of electronics and design practices that will un-tether lighting from building construction

Legacy guys will survive, in a similar format, different optics; but in a smaller market

Replacement LED bulbs are a supernova market: super-hot and then gone

“Sockets” are anachronistic

Designers: your time is now, step it up

Integrators: building automation, software, solar dealers, data/com, sound.

Yours to lose.

1. Clear, broad channel strategy, with multi-industry ties (semi, CE, solar, telecom)

2. Multiple channel agility and relationships

3. Design innovation

4. Broad grasp of building product changes:◦ HVAC, controls, security, communications

◦ Installation, labor issues, technology R&D

5. Capital

6. TALENT

“In times of rapid change, experience could be your worst enemy” J. Paul Getty

Ted Konnerth, PhD

tk@egretconsulting.com

847-307-7125