Philips 2012 Annual Report Download - page 76

6 Sector performance 6.3.1 - 6.3.3
76 Annual Report 2012
6.3.1 Lighting business landscape
We are witnessing a number of trends and transitions that
will affect the lighting industry in the years to come and
change the way people use and experience light.
We serve a large and attractive market that is driven by
the need for more light, energy-efficient lighting, and
digital lighting. Over half the world’s population currently
lives in urban areas: a figure that is expected to rise to
over 70% by 2050. That means 3 billion extra city
dwellers. These people will all need light. In addition, the
world needs more energy-efficient light in the face of
rising energy prices and climate change. At the same time,
the lighting industry is moving from traditional to digital
lighting – lighting solutions enabled by the integration of
LED technology, luminaires, lighting controls and
software.
Between now and 2015 we expect the value of the global
lighting market to grow by 5-7% on a compound annual
basis. The majority of the growth will come from LED-
based solutions and applications – heading towards a 45%
share by 2015 – and from growth geographies.
In 2011 the lighting industry as a whole was recovering
from the global economic developments in 2010. In 2012,
however, this recovery slowed due to widespread
downward pressure on GDP, weaker consumer markets
in mature geographies, and continued weakness in the
construction market. Growth geographies continue to
show healthy growth, albeit somewhat at a slower pace.
6.3.2 Enhancing life with light
We believe that by focusing on what people really need
and leveraging our expertise with a broad range of leading
partners, we can create and deliver the most innovative
and meaningful solutions on the market.
Our lighting solutions are transforming urban
environments, helping to create livable cities by enhancing
safety, municipal identity and residential well-being.
Building owners and retailers are recognizing the benefits
of energy-efficient lighting in reducing their operational
costs. And schools are learning how lighting can improve
education and well-being. At the same time, consumers
are increasingly using lighting to create their own
ambience at home as an expression of their lifestyle.
We believe that the rise of LED, coupled with our global
market leadership, positions us well to continue to deliver
on our mission to 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 121 years, laying the basis for our current
strength and ensuring we are well-placed to be a leader
in the digital transformation. We aim to further
strengthen our position in the digital market through
added investment in LED leadership while at the same
time capitalizing on our broad portfolio, distribution and
brand in conventional lighting (‘managing the golden tail’
– there is a significant opportunity to grow market share
and optimize profits in conventional lamps and drivers by
flexibly anticipating the slower or faster phase-out of
conventional products).
We address people’s lighting needs across a full range of
market segments. Indoors, we offer lighting solutions for
homes, shops, offices, schools, hotels, factories and
hospitals. Outdoors, we offer solutions for roads (street
lighting and car lights) and for public spaces, residential
areas and sports arenas. 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 and water
purification.
Philips Lighting spans the entire lighting value chain – from
light sources, luminaires, electronics and controls to full
applications and solutions – through the following
businesses:
• Light Sources & Electronics: LED, eco-halogen,
(compact) fluorescent, high-intensity discharge and
incandescent light sources, plus electronic and
electromagnetic gear, modules and drivers
• Consumer Luminaires: functional, decorative, lifestyle,
scene-setting luminaires
• Professional Lighting Solutions: controls and luminaires
for city beautification, road lighting, sports lighting,
office lighting, shop/hospitality lighting, industry lighting
• Automotive Lighting: car headlights, car signaling,
interior
• Lumileds: packaged LEDs.
The Light Sources & Electronics business conducts its
sales and marketing activities through the professional,
OEM and consumer channels, the latter also being used
by our Consumer Luminaires business. Professional
Lighting Solutions is organized in a trade business
(commodity products) and a project solutions business