Philips 2010 Annual Report Download - page 96

6 Sector performance 6.3 - 6.3.3
96 Annual Report 2010
customize their indoor and outdoor environments as and
when they desire. Flexible and dynamic, our LED lighting
solutions allow a much higher degree of customization
and provide significantly greater possibilities for ambience
creation than solutions based on conventional
technologies.
6.3.1 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 (LEDs). 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, LED 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 2015, we expect the value of the global
lighting market to grow by 7% on a compound annual
basis, assuming global economic growth (GDP) of around
4%. The majority of the value will be in LED-based
solutions and products – heading towards 50% by 2015.
As one of the global leaders 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 as a whole has been recovering in
2010 from the global economic developments in 2009,
though recovery is unevenly spread, with demand picking
up in emerging markets in particular. For example, the
Chinese authorities are expected to calibrate policy to
ensure that the economy continues to grow at around 8%
in 2011, despite the slowdown in the West. Emerging
markets have rebounded strongly (with the exception of
much of Eastern Europe, which is constrained by an
ongoing public- and private-sector balance-sheet
adjustment), but indicators suggest that most of the
rebound is now over, with expansion expected to settle
into a more sustainable trajectory.
Automotive and Lumileds markets benefited most from
regained confidence and economic growth. Luminaires
markets are still slow, particularly in the mature markets.
Total world construction spend is expected to increase at
a compound annual growth rate of about 5% over the
period 2010-15. Early signs of revival in 2010 could be
observed in the infrastructure sector, with 1.5% growth
year-on-year.
6.3.2 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.
6.3.3 About Philips Lighting
Philips Lighting is a 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
market segments. 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.