Low-Priced Products Shake the Market

In Jul 2009 Toshiba Lighting & Technology Corp of Japan, an old hand in the lighting industry, announced a new bulb-type LED lighting product at about half the price of the prior model. The first bulb-type LED lighting, closely resembling a standard incandescent bulb, was only released in Mar 2009. The firm had no choice, though, forced to counter a low-priced competitive product released by Sharp Corp of Japan.


Sharp Shock
Toshiba Lighting & Technology released its LED version of the midget reflector bulb, using an E26 socket, in Dec 2007. At the start it was only available in a 40W-equivalent version, but the firm followed it up with a 60W-equivalent design in Aug 2008. Both models had fairly large bodies, however, needed for power supply circuits, heat radiation surface area, etc, limiting applications.

A little over half a year later, in Mar 2009, the company released a 40W-equivalent bulb-type LED light with a manufacturer suggested retail price (MSRP) of Yen10,500, and a street price of about Yen8,000. Offering the same size and brightness as an incandescent bulb, it marked a major evolutionary step in LED bulbs, escaping former problems of dimness and limited application.

Sharp mounted an attack on this market with lower cost. The company only entered the LED lighting market in 2008, but in Jun 2009 announced a bulb-type LED light with a street price of about Yen4,000. The price, set at half that of a competing product already on the market, sent shockwaves through the industry. One result was that Toshiba Lighting & Technology was forced to release its 60W-equivalent product, announced immediately thereafter, for a MSRP of about Yen5,000 (with a street price of about Yen4,000). The price for a given performance dropped by half in only four months (Fig 1, Table 1).

Other companies in the field were quick to follow suit. Ecorica Inc of Japan, which had only entered the bulb-type LED market in Apr 2009, slashed the price of its product from Yen7,200 to Yen3,780 in three months, while Irisohyama Inc of Japan released its own product at Yen3,980. A press release from NEC Lighting Ltd of Japan, which announced a bulb-type LED in Aug 2009, says, "The market price will be on a par with competing products." And industry leader Panasonic Corp of Japan will release a bulb-type LED in the same price zone in Oct.