OLED Lighting in a Low-Growth World
Published: March 13, 2012 Category: OLEDs

Phasing out incandescent bulbs is likely to speed up the OLED lighting market, but in the end all this can do is help the market reach saturation faster.  With rapidly declining prices expected in the OLED lighting space, the most likely long-term impact on the OLED lighting market of phasing out incandescent bulbs will be rapid penetration for a few years following the phase out, followed by fairly slow growth for OLED lighting in dollar terms after that. 

Regulation in this sense helps the OLED lighting business by bringing revenues earlier than might have otherwise occurred.  But it also brings the market saturation point closer too.

The OLED Lighting Industry is in Deep Thought Mode

Some observers of the OLED lighting scene and even some insiders seem to think that absence of news from OLED lighting in the past year is a sign that things are not going so well technically; that performance and size have not been improving to the degree expected.

There may well be some truth to this. However, one reason that NanoMarkets is not too pessimistic about this development is that we have seen this type of pattern in the evolution of a new technology before.  It is easier to make progress in a field when one is first starting up in it.   We think that OLED lighting has reached a point where the industry is primarily focused on solving technical problems of which there are many.  None of these problems seem (to NanoMarkets anyway) to be insurmountable, but they will take time to resolve. 

The primary takeaway from all this, is that there is really unlikely to be any great leap forward in penetration of the general illumination market for the next (say) three years until some of the "kinks" in OLED lighting are straightened out.  For now the OLED lighting market is entering into a less flashy phase when major manufacturers are focusing on creating higher volume manufacturing facilities—factories that can take OLED lighting beyond the pilot line stage—and on improving the cost/performance ratio for OLED lighting.   These are not always easy things to do and tend to focus the collective mind of management more on practical matters than on PR.

Within a few years we would expect OLED lighting to start to grow quite fast as it reaches price points and performance levels that will take it into mass markets.  This seems to be the view of many of the OLED lighting firms too, although there are also less charitable views of what is going on in the OLED lighting market and there is some sentiment that OLED lighting will never find sales much beyond the luxury/showroom kind of lighting where it is used now. 

In addition to the worldwide economic situation, which is discussed above, the reason for pessimism in the OLED lighting market is usually a sense that OLED lighting will never reach a point where it can be sold effectively on its high energy efficiency or that it will never reach acceptable price points or that OLED lighting panels will never be large enough to be easily used in office lighting.

Again, NanoMarkets is not so bearish and neither apparently are a lot of large companies.  Still, we think it is time to reconsider our forecasting model for OLED lighting in depth, in terms of the current technical state of the art, market structure and price points for OLED lighting.

Deeper analysis of pricing trends:  Our previous pricing analysis has primarily been made on the basis of unit prices, which we still believe is the approach that should be taken, because in the final analysis, OLED lighting panels substitute for existing lighting, which is invariably sold by units, not by the square foot.

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