Philips 2009 Annual Report Download - page 96

Another key development is the trend toward custom
solutions. Increasingly aware of the possibilities beyond
standard solutions, consumers, businesses and national
and municipal authorities demand highly adaptable lighting
solutions which they can use to customize their indoor
and outdoor environments as and when they desire.
Flexible and dynamic, our LED solutions allow a much
higher degree of customization and provide significantly
greater possibilities for ambience creation than solutions
based on conventional technologies.
5.4.2 Lighting landscape
We see three main transitions that will affect the lighting
industry in the years to come. The first is a move towards
energy-efficient light sources, in response to rising energy
prices and increased awareness of climate change.
The second transition is the move from traditional
vacuum-based technologies to solid-state lighting
technology. Solid-state or LED lighting is the most
significant development in lighting since the invention of
electric light well over a century ago. Offering
unprecedented freedom in terms of color, dynamics,
miniaturization, architectural integration and energy
efficiency, solid-state lighting is opening up exciting new
possibilities.
The third transition is from bulbs and components as the
point of value creation to end-user-driven applications
and solutions. Increasingly, these applications and
solutions will include lighting controls. We believe that,
going forward, a key differentiator among lighting
suppliers will be the innovative strength to create systems
and solutions that are truly customer-centric.
Between now and 2020, we expect the value of the global
lighting market to grow by 6% on a compound annual
basis. The vast majority of the value will be in LED-based
solutions and products – possibly as much as 80% by 2020.
As the global leader in LED components, applications and
solutions, with a strong global presence across the LED
value chain, we believe we are well positioned for the
changes at hand.
The lighting industry has been severely impacted by global
economic developments in 2009. In particular, we have
seen a dramatic slowdown in demand, partly on the back
of tighter availability of credit and weaker spending on
public infrastructure projects and partly because of
reduced general consumer spending. Though we saw the
most profound impact of the recession in the automotive
and construction sectors, other business segments have
also been affected. While overall economic visibility
remains limited, we expect some of our markets to
remain under pressure in 2010.
5.4.3 Simply enhancing life with light
Philips Lighting is dedicated to enhancing life with light
through the introduction of innovative and energy-
efficient solutions or applications for lighting. Our
approach is based on obtaining direct input both from
customers and from end-users/consumers. Through a
market segment-based approach, we can assess customer
needs in a targeted way, track changes over time and
define new insights that fuel our innovation process and
ultimately increase the success rate of new propositions
introduced onto the market.
We aim to be the true front-runner in design-led, market-
and consumer-driven innovation – both in conventional
lighting and in solid-state lighting – while continuing to
contribute to responsible energy use and sustainable
growth.
We believe the rise of LED, coupled with our global
leadership, positions us well to continue to deliver on our
mission to simply enhance life with light.
5.4.4 About Philips Lighting
Philips Lighting is the global market leader, with
recognized expertise in the development, manufacturing
and application of innovative lighting solutions. We have
pioneered many of the key breakthroughs in lighting over
the past 100 years, laying the basis for our current
position.
We address people’s lighting needs across a full range of
environments. Indoors, we offer specialized lighting
solutions for homes, shops, offices, schools, hotels,
factories and hospitals. Outdoors, we provide lighting for
public spaces, residential areas and sports arenas. We also
help to make roads and streets safer for traffic and other
road users (car lights and street lighting). In addition, we
address the desire for light-inspired experiences through
architectural projects. Finally, we offer specific
applications of lighting in specialized areas, such as
horticulture, refrigeration lighting and signage, as well as
heating, air and water purification, and healthcare.
Philips Lighting spans the entire lighting value chain – from
lighting sources, electronics and controls to full
applications and solutions – via the following businesses:
• Lamps: incandescent, halogen, (compact) fluorescent,
high-intensity discharge
5 Our sector performance 5.4.1 - 5.4.4
96 Philips Annual Report 2009