Lighting Industry, News, Office, Residential, Retail

Surprise! LED bulb prices rise in US

What goes up: Like the light in this picture, LED bulb prices have astonishingly floated up in the US but they seem destined to fall again in keeping with the ongoing general trend around the world.

It’s hardly news when the price of LED bulbs decline. We’ve come to expect it. Only a few years ago $50 retail tags repelled most would-be consumers from the energy saving technology. Vendors started shaving, and buyers started to come. Now LED bulbs sell for under $10 in some regions of the world.

And the prices will just keep spiraling down. Right?

Not in the United States!

According to Taiwanese market intelligence firm TrendForce, while prices either held steady or moved predictably downward in most of the world from the second quarter to the third, they bounced up in the US.

‘LED bulb prices were up 14.3% in the U.S. market,’ TrendForce’s LEDinside unit reported, in reference to bulbs rated at 450-to-485 lumens, which with a power of 8 watts is roughly equivalent to a conventional 40-watt incandescent. ‘Manufacturers including Cree, Philips, GE and other renowned brands have raised prices for certain products in the U.S. market.’

The US wasn’t the only country to buck the trend, as prices edged up slightly in Japan, by 1.5 percent.

At the other end of the spectrum, Germany held true to the tumble.

‘Bulb prices fell the most in Germany, having dropped 13.1% in September as existing bulb product prices dwindled,’ LEDinside wrote. ‘Prices also slid 3.4 percent in the UK market last month, as prices for some products steadily declined. The Philips 8W LED bulb for instance was down 4 percent to $27.20 in [the] UK, and some low-priced [vendors] have reentered the market.’

The German plunge was even greater in 60-watt-equivalent 800-to-810 lumen bulbs (roughly 12 watts in LEDs).

‘Prices fell steeply in the German market last month, having dropped as much as 24.8%,’ according to the report. ‘This was mainly due to further price cuts among existing bulb products, and some products entered sales promotion. For instance, LG 12.8W LED bulbs [were] marked down 31 percent to $14.35 on the German market. Prices also dropped sharply by 19.4% in the UK market in September, with Osram 10W LED bulb prices down by more than 30% to US $12.2.’

The price of 60-watt-equivalent bulbs fell in Japan by 9.9 percent to $16.60, and remained stable in China, Korea and Taiwan. The US was again an exception, as prices jumped by 11.1 percent, with increases by Cree, Philips and Sylvania, LEDinside noted.

Worldwide, the price of 40-watt equivalent bulbs dipped by only 1 percent, to an average of $14.10, with a high of $43.10 and a low of $2.30 (the low was in China). The worldwide decline in 60-watt equivalent bulbs was a more noticeable 6 percent, to an average of $18.20, with a high of $50 and a low of $4.20 ($4.30 in China).

The steady march down in price has been necessary to win over consumers accustomed to spending as little as a dollar or less for wasteful incandescent bulbs. But it has come at the cost of vendors’ profits, and has been particularly challenging for large traditional vendors like Philips who are strapped with the costs of a legacy incandescent business as well as with the costs of developing new LED products and services.

Thus, Philips recently announced that it is seeking ‘alternative ownership’ for its lighting division. Companies like Philips might get some temporary respite from the atypical price rise in the States. But unfortunately for them, in an industry increasingly populated by aggressive, LED-only newcomers, what comes down is by no means generally destined to go up.

Photo is from Refat via Shutterstock