For proof of what one simple technology can do to bring a city into the future, look at what a simple change of light bulbs have achieved already in one major global city: Buenos Aires.
Buenos Aires replaced 91,000 light points with LEDs, the most promising current technology for smarter lights.
The result: A whopping 50% drop in the city’s carbon emissions. For just changing a few light bulbs, that’s a big step towards Buenos Aires’ plan to be carbon-neutral by 2030.1
Buenos Aires is far from alone. In the New York City residential market, there’s a chance to install up to 32 billion LEDs.
Add in the lights for office buildings and street lamps, multiply it by major cities across the globe, and it adds up to a staggering opportunity for investment: A $54.28 billion market for LEDs by 2022, and $20 billion by 2019, according to Zion Market Research.2
While LED bulbs are more expensive than incandescent bulbs, they use far less energy, and can last for many years without needing to be replaced.
So where does the smart money go? Phillips, and its Hue line of color-adjustable LEDs is already a popular choice with architects and interior designers as part of a home automation suite of technologies. General Electric, and its SmartLink line of lights, is another popular choice. Keep an eye on Austin-based Ketra, which has an impressive array of technology-based lighting. Also, check out Cree, Osram and Cisco Systems if you want explore more ways to invest in this tried-and-true future-proofed smart cities technology.
There are a few risks to consider here as well. LEDs are long-life bulbs, which means that they won’t benefit from the traditional cycle of planned obsolescence. So once the world has made the full transition to LEDs, demand is bound to slow. And we are talking about a mass-produced commoditized product, so that means a lot of competition, tough pricing and thin profit margins for some providers.
The key to investing in this trend will be focusing on key differentiators, which in this case means either innovation or design. That’s why it’s important to focus on Philips’ advanced lighting systems solutions and Ketra’s fashionable, design-oriented approach. While the future of smart lighting is unpredictable, these two companies have the strategies that are likely to rise to the top of the market.