SWOT Analysis of LED Smart Lights: Fighting the traditional light bulb industry

PESTLEanalysis Team
PESTLEanalysis Team
Table of Contents
Table of Contents

Smart lighting is a new industry and is not without glaring issues. This SWOT analysis of LED smart lights addresses their benefits, and opportunities.

Smart lighting. It gives you greater control of the lighting in your household. Consider this:

You could change the color and intensity with a click of a button on your smartphone. You could set up motion sensors to detect when you’re in a room and then tune them to automatically shut off when you’re not. All of this is possible with smart lighting. Smart lighting is a technological advancement. It might not be an expected one, but it’s an exciting innovation. Several companies compete and produce these smart bulbs for household, administrative, and business use.

But it’s a new industry and it’s not without glaring issues. This SWOT analysis of LED smart lights addresses the benefits, issues, and opportunities of this industry.

Strengths of LED smart lights: New bulbs and new tricks

Smart LED lights are light bulbs with the capability to change color and brightness by way of a smartphone app. The bulbs wirelessly connect to a smart device where you can fiddle with them as you please. You can even set up motion sensors to trigger the lights off and on depending if you’re close to the sensor.

The complete control is one of the major benefits of these lights. You can set the “mood” by changing the intensity. For instance, some pre-designed colors in the corresponding app are labeled “energize”, “relax”, and “focus”. Others intensities work as nightlights. If you want, you can create your own color and brightness rather than using a template. None of this possible with traditional bulbs, unless you manually change the bulb and swap it with a different one.

Another major benefit for consumers is a reduced electricity bill. Smart light bulbs tend to use less electricity than traditional bulbs. They also last longer — in fact, some survive more than 20 years! Because of the sustainability, we’re seeing more government incentives in their budget for the companies manufacturing these lights.

And unlike other forms of technology, smart light bulbs are simple to set up. Once screwed into the light source, you download the appropriate app and the two wirelessly connect. Once this happens, you just open the app whenever you want to turn the lights on and off or change the color.

Weaknesses of LED smart lights: It’s has a technological barrier to entry

The invention of smart light bulbs is relatively new. Too many people don’t know the bulbs exist, much less the benefits and strengths listed above. Companies producing these smart light bulbs, such as Phillips and FluxSmart, are competing with the tried-and-true basic light bulbs everyone knows, loves, and uses. It’s a tough market to battle against.

In this case, these companies need to focus more on the technologically savvy. People who are looking to “technify” their homes in various ways. These may be the same people buying Google Home or Alexa products. They’re familiar with smart devices already.

But even then, these bulbs are quite pricey. It can be upwards of $50+ for a bulb or two. People see the price and immediately say, “No, thanks!”. Especially if they’re worried about the setup process. Although it’s relatively simple for someone familiar with smart devices, it may be a headache for someone less savvy.

On top of that, not all smart bulbs follow the same setup process. While many use wireless, some may require an additional hub or light switches to be installed. This adds more confusion into the mix. Not to mention some bulbs only change brightness and intensity, while others can change colors. The more complicated the selection, as well as installation, the harder it’ll be to become mainstream.

With any technology, there’s a learning curve. Whether someone wants to deal with this rather than use the bulbs that are simple, cheap, and easy to screw in is the true question.

Opportunities for LED smart lights: An open market for organizations and schools

The government offering incentives for energy saving products like smart LED bulbs is a major opportunity for companies and investors. More money offered by the government allows for more products to hit the market. Introducing smart lighting is also positive for the environment too since it uses less electricity.

Right now, the LED bulb market is relatively fresh. Meaning, as technology advances, there may be more options for the innovation of future bulbs.

Rapid urbanization, and the need for more mobility are benefits for this industry. You can control your lights from afar, meaning it’s a smart investment for people who frequently fly. They can turn the lights on or off from countries away, as needed.

The market can also expand further into organizations. Rather than just offering bulbs for the home, some companies are supplying the product to organizations and universities. Since the bulbs can last years, the administration has more incentive to maintain these bulbs rather than continuously buying and replacing traditional bulbs.

People who wish to be more eco-friendly and use less electricity can see the benefits of smart lighting too. Focusing on this consumer base will be beneficial for the companies in this sector.

Threats to LED smart lights: Traditional bulbs dominate the lighting industry

Despite the slow movement of this industry, plenty of competitors already exist. Each one is offering a similar product and aiming to be the leader in the smart lighting industry. This is a problem for everyone involved; they’re all fighting for the same slice of a tiny pie.

Because not only are they competing against each other, but also the traditional bulb industry. And it’s dominating. You’ll find a bigger selection of non-smart bulbs in any given store. Then, placed side-by-side with any smart bulb, the traditional options will also be vastly cheaper. At first notice, a customer will buy what they’re used to, rather than choosing the pricier option.

When you see a regular lightbulb, you’ll choose on a few factors, but mostly on price or intensity. You don’t need to read the box to figure out how to use it. Smart lighting requires you to stop, read, and learn. That’s a major barrier to this.

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