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"Several major brands have recently announced their intentions to cut LED bulb prices to encourage uptake in the consumer market. But what impact might this cost-cutting drive have on the quality of the technology we’re supplying and its future in the market?
Consumer reluctance to pay higher prices is a minor obstacle to widespread LED adoption compared with the disappointment and ultimate rejection that would result from technology falling short of expectations.
As an industry that has learnt this lesson the hard way, we should know better. After all, we’re still battling the memory of LED manufacturers that over promised, under delivered and left a legacy of considerable scepticism regarding LED performance.
Producing lower cost lamps inevitably means using less efficient, old generation chips, which seriously impact performance; this does not benefit the industry, the end user or the energy efficiency agenda.
Consumers will never be convinced to switch to LED lamps unless they see the advantages that the best LED technology can deliver: high quality light output, long life and significant energy savings.
Rather than be tempted into producing sub-standard technology to answer demand for the lowest possible costs, we must shift the consumer mind set away from consumables and towards solutions. This change can be effected by consistent, high quality technology that will trigger increased consumer demand and, as a result, drive competitive product cost.
In a sustainable future our understanding of ROI cannot be limited to the initial cost of the lamp but must incorporate total product life span, product consumption, waste and recycling costs. This is a shift in logic that must be reflected in our own attitudes before we can encourage it in our consumers.
As an industry it is important that we evolve from operations based on high volume production, retail presence and a commoditised market and look forward to long-term relationships with clients and a business model based on service and solutions provision.
Most importantly, we need to take responsibility for empowering the consumer through better information, in particular unified and lifetime-based product standards.
Ultimately, the answer to pricing pressure isn’t to artificially drive cost down with less efficient technology but to help the consumer to understand exactly what it is they are buying.
When the true value of LEDs becomes clear to them they will be considerably more prepared to accept the cost."