Will U.S. consumers pay somewhere between $40 to $60 for a single LED light bulb? That’s what Dutch electronics giant Philips (s PHG) will soon find out — this week at the world’s largest lighting conference Lightfair, the company launched a 12-watt LED bulb that can replace a 60-watt incandescent. Philips says its so-called “EnduraLED” light bulb can deliver 80 percent energy savings and last 25,000 hours, or 25 times longer than an incandescent bulb (see our list of 5 LEDs that can replace incandescents, as well as this cheatsheet on the metrics of the bulb).
Ed Crawford, CEO of Philips Lighting North America, tells us Philips’ bulb will likely retail around $60 and will be available in the U.S. in the fourth quarter of 2010. Other competitors like GE are shooting for prices closer to between $40 and $50. So why has Philips launched this bulb now and what does the company expect to face when it tries to sell it? Here’s 5 questions from an edited interview with Crawford:
Q). Why has Philips launched this bulb now — and not last year, or next year?
A). We’re introducing the 60 watt LED replacement now because we see this as a huge opportunity. There’s over 400 million incandescent bulbs in the US, and the barrier up until now has been technology. In particular the breakthrough is that our bulb can replace a 60 watt incandescent bulb, because 60-watt bulbs fill half the sockets in North America.
Q). What’s the expected retail price?
A). While we won’t be the ones setting the exact price, we believe it will retail somewhere in the $60 range — maybe more or less. Initially, but as you say with new technology the prices will come down over time. And ultimately this will save customers money.
Q). How widely available will it be? Will it be sold everywhere that incandescents are sold?
A). Our standard 60 watt incandescents are basically sold everywhere, and we’ll eventually have similarly broad distribution for the LED bulb. But we will introduce the LED bulb first into the professional channel, given they are used to the ROI (return on investment) pay back analysis. Then shortly afterwards we’ll introduce it into the retail markets for home owners and residential use.
Q). Do you think there needs to be substantial education process when it comes to buying LEDs and the return on investment?
A). To me that’s the biggest challenge: marketing and communication. It’s an interesting challenge because consumers are already looking at payback analysis in other areas, but it’s fairly new for lighting. The industry has done such a good job of marketing the incandescent that it’s hard to get rid of it. So that’s the number one challenge. Getting consumers to see that they can save money by spending more money up front and getting that back over energy savings.
Q). Is Philips looking to work with, or acquire, innovative LED startups?
A). We don’t comment on acquisitions. I think its certainly public knowledge that Philips has been active in acquisitions. Some large some small. We’ll always be looking at innovative companes, new technologies, and we have a lot of people spending a lot of time on development. Absolutely if there are patentable advancements out there we want to look at them.
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