LiFi Wireless Internet and the Lighting Industry

LiFi: What It Is And Why The Lighting Industry Should Care

I have been hearing a lot of buzz about LiFi in the last few weeks. People around the world are raving about how it will change the way people access the Internet. And while I love the idea of innovating Internet availability, important questions abound: How will this affect the lighting business? What can we expect in the future? Are we seeing another revolution in the industry? As lighting manufacturers and providers, these are questions we need to be answering.

LiFi is a wireless optical networking technology that uses light-emitting diodes (LEDs) for data transmission.

Source: TechTarget.com

What is LiFi?

If we want to talk about how LiFi will affect our industry, we need to understand it first. LiFi, short for Light Fidelity, is a wireless communication system that uses visible light instead of radio waves. Like WiFi, it transmits data electromagnetically, but LiFi has been shown to produce speeds that leave traditional wireless services in the dust. Recent lab trials have clocked speeds over 18,000 times faster than the average US internet speed. Coupled with many other advantages including security and resistance to interference, it’s no wonder people are getting excited about it.

How Does LiFi Work?

LED lamps produce a constant stream of light that can be dimmed or brightened at rapid rates. The LiFi system harnesses that functionality by fluctuating the light levels emitted by an LED to send signals to a photosensitive device. These fluctuations happen so fast that they are imperceptible to the human eye, but are strong enough to be decoded by the device and translated into binary code. The device then sends signals back to a LiFi capable LED lamp and the process repeats, giving you an extremely fast connection to the web.

Why Should I Care About LiFi?

There is a dilemma right now in the lighting industry pertaining to LEDs. How can anyone support a business when clients only need to buy product once every ten years? The numbers just don’t add up. This has rocked the core of how business is done, and has left some people questioning whether they should get out while they can. LiFi, and products like it, are turning this perception around.

Everyone uses lighting products in their everyday lives, but hardly anyone thinks about where the light comes from. People take light for granted, and expect to have it wherever they go. But the advent of lighting as a conduit for other services has shifted the paradigm. It is now being seen as something of immense value. That gives distributors and energy service companies an incredible opportunity to sell their products as an ongoing program, constantly providing innovative new functionality with every lamp or fixture purchased.

How Will LiFi Affect the Lighting Industry?

LiFi is just the beginning of this revolution. These kinds of advances will continue as businesses seek to limit their environmental footprint and cut costs to improve their bottom line. If we want to survive we cannot let this incredible opportunity pass us by. As experts in this field we should be spearheading the movement and reaching for ever greater advances. This is the future of our business, and it’s time we start getting in on the action. Lagging behind just isn’t an option.

Goodbye, CFLs: General Electric’s Ditching Them for LED Bulbs

The following has been republished from Rich Smith of The Motley Fool. You can view the original article here.

General Electric’s (NYSE:GE) Appliances and Lighting division produced $8.8 billion in sales for GE last year. The company tried to sell the appliances half of that division to Electrolux, failed, then lit upon Haier as an alternative buyer. But GE kept tight hold of its lighting division.

And now it’s doubling down.

Present at the inception

Why is GE holding on to its lighting division, even as it parts with appliances? It could be as simple as this: GE is light bulbs.

The company that Thomas Edison founded is so well known for light bulbs, in fact, that its famous 80’s tag line “We bring good things to life” is often misquoted as “We bring good things to light.” Yet GE has evolved over the years from a maker of incandescent bulbs (which are on their way out) into the top-rated seller of compact fluorescent light (CFL) bulbs on Amazon.com, and into a specialist in LED lighting today.

As reported on Bloomberg earlier this week, GE has just announced plans to discontinue production of CFLs entirely, and focus on LEDs instead. The switchover is slated to be complete by the end of this year. Although much more efficient than the incandescents they replace, CFLs are not always popular with consumers. They cost more up front than incandescents, and are less efficient than LEDs — resulting in less cost savings over time.

Now, caught between the proverbial rock and a hard place, CFLs may be going the way of the dodo. According to Bloomberg stats, nationwide CFLs control only a 15% share of the lighting market, and that’s declining. LEDs have 15% as well, but that share is growing, and GE predicts that by 2020, LEDs will represent 50% of all light bulbs used in the U.S.

Perhaps most important, because LEDs are essentially microchips writ large, they offer versatility that appeals to GE as a means of widening its “smart home” market share — by linking lighting to smartphones via Bluetooth, for example, or even using light bulbs to extend Wi-Fi ranges within the home. And the fact that LEDs can sell for as much as five times the price of CFLs? That’s just gravy.

Hold up a sec. What was that about LEDs and microchips?

LEDs — light-emitting diodes — are basically just semiconductors that emit light when activated by electricity. That means that for investors interested in riding General Electric’s coattails into this industry, there are a whole lot more investing opportunities than just buying GE stock itself.

Here are three of them.

Veeco Instruments

With a market cap of only $760 million, small-cap Veeco Instruments (NASDAQ:VECO) offers arguably the greatest potential to grow alongside growing consumer interest in LEDs. Veeco makes the equipment that makes LEDs. It’s not profitable at present, but generated $54 million in free cash flow last year, according to data from S&P Capital IQ. Weighed against the company’s small market capitalization and large cash hoard ($400 million, and almost no debt), that works out to an ultra-cheap enterprise value-to-free cash flow ratio of just 7.5.

On the minus side: Veeco earned no profit in 2014, or in 2015, either, and is expected to lose money in 2016 as well before returning to profitability. For a price this cheap, “You pays your money and you takes your chances.”

Cree

Investors seeking clearer growth prospects might prefer to look at the granddaddy of LED investments, Durham, North Carolina-based Cree (NASDAQ:CREE). Cree sports a $2.8 billion market cap, and more than $400 million (net of debt) in the bank.

Like Veeco, Cree is currently unprofitable from a GAAP standpoint. But also like Veeco, Cree generates copious piles of cash from its business. In fact, the past 12 months saw Cree generate $102 million in real cash profits. That works out to an enterprise value-to-free cash flow ratio of just 23.5 on the stock. If Capital IQ estimates of Cree growing its profits 38% annually over the next five years are anywhere close to correct — Cree could be a bargain.

Applied Materials

Like the idea of investing upstream in LEDs, but don’t like the idea of buying stocks that don’t earn GAAP profits? Applied Materials (NASDAQ:AMAT) is an LED equipment-maker like Veeco. But unlike Veeco, Applied Materials made $1.4 billion in profits last year. Granted, only 69% of that ($948 million) was backed up by real free cash flow, so the stock’s EV/FCF ratio isn’t as pretty as its P/E. But with a price-to-earnings ratio of only 15.3, and a growth rate of 15.3%, Applied Materials looks pretty cheap anyway.

Bonus points: Applied Materials pays a 2.3% dividend.

And there you have it folks. Three stocks that, like GE, hope to ride the wave of consumer adoption of LEDs over CFLs. None of them have the size, scale, or name recognition of General Electric, but for investors hoping to sneak in on the ground floor of the LED phenomenon, that might work to your benefit.

At these low prices, it certainly can’t hurt to look. You just might bring a great bargain to light.

Er, life.

Denver Lighting Manufacturer Adds Two to Board

Bob Grant, Robert C. Hawk to Help Guide Commercial LED Light Maker

DENVER, Colo. – (Jan. 26, 2016) – START Lighting, a Denver-based manufacturer of high-quality LED products for the commercial electrical industry, today announced that Bob Grant and Robert C. Hawk have joined the company’s board.

Bob Grant brings more than 25 years of experience as a senior executive to his new role with START Lighting. Mr. Grant’s experience spans a wide range of companies, from Fortune 100 to start-ups, with a focus on services and technology. He has held executive roles in sales, marketing and business development in high-tech companies including EagleView Technologies, Alliente (acquired by Ariba), Ligos Corporation, Covad Communications (IPO) and US WEST (merged with Qwest). Bob Grant is an angel investor and advisor to several high-tech startups in the Denver area and holds a Masters of Science in Management from the MIT Sloan School of Management (Sloan Fellow 1988). He has served on the board of several companies and non-profits.

Robert C. Hawk is president of Hawk Communications, whose mission is to help develop high technology companies. In 1997 he retired as President and CEO of US West Multimedia Communications, Inc., where he was responsible for the Media 1 cable business and the Time Warner partnership. From 1986 until 1995, Hawk was president of the Carrier Division of U S West Communications, Inc. From 1997-2002, he served as a Special Limited Partner of Crosspoint Venture Partners, helping take 16 companies public in board and advisory roles. He is currently a Special Limited Partner of DCM capital management and Miramar Venture Partners and serves as a director of several private high technology companies.

“We are incredibly excited to welcome these two accomplished and gifted businessmen to our board,” said Jason Barbour, START Lighting’s CEO. “As we aim for a new era of growth, I know their wisdom and knowledge will be a major contributing factor to our success.”

About START Lighting

START Lighting manufactures high quality LED products for the commercial electrical industry. Producing both off-the-shelf and customized solutions, START Lighting provides innovative solutions to commercial lighting challenges. By cutting product development time from months to as little as a week, we can produce custom-made lighting products faster than competitors while still meeting our rigorous performance and quality standards. To find out more, please visit www.start-lighting.com.

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For more information please contact us.

 

Could the Future of the Big 3 Lamp Lines Be On a Dimmer?

The following is reprinted Electrical Trends. You can view the original post here.

Had an interesting discussion today with a distributor regarding lighting / lamp manufacturers which created the thought of “what is the future of these companies?”

For clarity, the discussed manufacturer marketplace is:

  • Philips, Sylvania and GE being companies that are lamp and fixture companies.  And, it appears, that all 3 are attempting to figure out what their model is / should be for the future.
  • Then there is Cooper, Acuity, Hubbell, Juno, Cree and others that are traditionally fixture lines (and yes, some of Philips’ lines falls into here – Lightolier, Thomas Lighting, etc) and smaller lines like Rab, Atlas, Topaz Lighting and others or LED companies like Digital Lumens,   **Start Lighting** and Lunera (essentially think of these lines as “who?”)

  • and we can’t forget companies like TCP (known primarily for lamps but now also into fixtures), Eiko, Satco and others that are more on the lamp side of the business.

And LEDs, plus consolidation, have muddied the waters.

The discussion then turned to perhaps a more philosophical / blue ocean discussion … what will LEDs mean to lighting supplier “relationships” for the future?

  • With LEDs growing, does this diminish the need for lamp replacements? Is lamp replacements a profitable, and large enough, segment of the market for many distributors?
  • With LEDs growing, and if a distributor focused on new construction and retrofits, and minimally on the replacement / MRO market, do they need a “major” lamp line (Philips, Sylvania, GE) or could they do very well with fixture lines and “tier 2/3” lamp suppliers?
  • Given that LEDs are 35%+ of fixture manufacturer sales, the component suppliers are now different with LED components being available from a multitude of suppliers.  Does this make the “big 3” less relevant longer-term?
  • What does it mean for someone like Cooper Lighting and the potential leverage they may have given their ownership by Eaton and a potential relationship (lead generator) with Eaton’s ESCO business?
  • While many talked that Sylvania should have / could purchase Acuity, is Acuity in the drivers seat now?
  • Will the lamp “big 3” that we remember of 2009 be of important in 2019 (5 years from now)? Will the drive to “control the hole” in the ceiling and cannibalize existing business (which was necessary given the technology change) result in changing corporate dynamics in the lighting industry? And what does this mean for distributor relationships? The companies that they align with? Have they staff and train their organizations and the resultant impact on profitability?

Will being a “solution / system” sell and offering the fixture, lamp source and dimming control system be what your customers want? Being locked into a system longer-term? Will designers recommend this? Will purchasing accept this?

And, for a distributor, could the answer be “just align with whichever fixture manufacturers have the best salespeople / agents in your territory” (unless you train your own) and consider these relationships “transactional?”

Just some food for thought and a reminder that the events of yesterday do not have to be the precursor for today nor a suggestion for tomorrow’s strategies.  The market, especially the lighting market, is changing rapidly.

What are your thoughts on the future of the “big 3 lamp lines”?

LEDs Turn Out the Light on Incandescents and CFLs

The following is reprinted from Fox News. You can view the original article here.

Most people have accepted that it’s all but over for old incandescent bulbs. But CFLs—compact fluorescent bulbs, the titular replacements for incandescents—may be rapidly becoming extinct as well.

LEDs or light-emitting diode bulbs are the next lighting generation, and they’ve made significant advances in the last couple of years. I’ve been testing dozens of bulbs from companies such as Cree, GE, Lighting Sciences, Sylvania, and Toshiba, and found that not only are LEDs a better alternative with superior lighting characteristics, they offer more features than any previous lighting technology—as long as you understand how they are rated and what to look for.

LEDs offer several advantages. First and foremost is the fact that LEDs are more efficient, saving electricity—and money. A typical 60-watt replacement LED actually uses just 11 watts to produce the same brightness. They can also replace everything from reading lamps to overheads, although LEDs vent heat from the base of the bulb and so are not appropriate for completely enclosed fixtures.

Compared to CFLs, LEDs do not contain hazardous, mercury-tinged gas, and they can withstand being turned on and off repeatedly without reducing their life span. LEDs also come on instantly, unlike CFLs that typically have to warm up (which is why some people just leave them on all the time). Most LEDs are also dimmable (an expensive feature for special CFLs), and they do not suddenly burn out without warning (LEDs gradually lose their brightness before failing).

The solid-state components of LEDs can also make them potentially shock resistant and virtually unbreakable, depending on the kind of glass used. I accidentally dropped a couple of Sylvania’s Ultra bulbs from a height of about five feet onto a living room carpet. No broken glass, no poison gas, and the Sylvania bulbs still worked perfectly.

The biggest downside to LEDs has been their price. Just a couple of years ago, 60-watt equivalent LEDs were $40 each or more. Today, however, the price of such A19 (standard household lamp bulb sizes) bulbs has dropped to under $10 each. That may still sound like a lot of money, but these bulbs have a usable life span equal to about 30 to 50 incandescent bulbs or 3 to 5 CFLs. In other words, based on 3 hours a day of use, an LED bulb may last you for over 20 years.

So why are some LEDs so expensive and why do some emit harsher light than others?

To understand what you’re buying and the kind of light you’ll get, you need to know a little about LED specifications.

Rather than looking at wattage ratings or replacement equivalence ratings, you should look at the lumen’s rating of a bulb to see how bright it will be. An 800 lumens rating, for example, is about typical for replacing a 60-watt incandescent bulb.

Color temperature indicates what kind of light the bulb will emit. A “soft white” bulb that has a comfortable yellowish light similar to incandescents of old will have a color temperature of 2400 to 2700 K (K is for Kelvin). A “clean white” LED bulb that has less yellow and a whiter glow will have a 3000 K rating. “Day light” or “natural white” bulbs will have a 4000 or 5000 K rating. These bulbs, called “cooler” because they have a bluish hue even though they have a higher K rating, look harsh to some viewers but can be ideal in certain situations. I found 5000 K bulbs worked extremely well in lamps that were near a window, mimicking day light on cloudy days. A GE lighting expert told me that folks in the sunny south tend to prefer “day light” bulbs; those in the darker (and colder) northeast tend to prefer yellowish LEDs.

However, brightness and color temperature ratings alone will not tell you how certain colors or shades appear under a particular bulb. For example, while sorting laundry under a 5000 K, 800 lumens Cree day light bulb I found a pale pink shirt looked white but under a soft white 2700 K bulb from Cree with the same lumens rating the shirt was obviously pink. The reason for the difference is how accurately a given bulb displays the full spectrum of light.

So-called CRI or color rendering index numbers are supposed to give shoppers a way to judge how a bulb will look in terms of revealing colors, but the numbers can be deceptive. Both Cree bulbs, for example, had CRI’s of 80 (as do most household LED bulbs). But the CRI number doesn’t tell you where in the color spectrum the light falls short or may over emphasize a given color. Another design from Lighting Science, for example, has the same CRI as the Cree bulbs but uses a special filter to remove specific wavelengths of light and encourage melatonin production to improve sleep patterns, according to the company.

If color accuracy is very important to you, invest in higher CRI bulbs. These are sometimes called “enhanced spectrum” bulbs or use brand names like GE’s Reveal bulbs. These lights have a higher CRI of 90 or more and colors have a crisper appearance under them. But expect to also pay more for high CRI bulbs; a 60-watt replacement GE Reveal LED is just under $20, for example.

Still for all these nuances, even 80 CRI rated LEDs are much more accurate than CFLs. In the future, you may also be able to tune your LED lights, yellow for late at night, whiter for overcast days. In fact, Philips already offers a $200 Hue 3-bulb lighting package that you can program from a smartphone.

In the meantime, there’s no reason to buy CFLs, which are yesterday’s technology. LEDs are safer, brighter, and better.