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Philips Lighting rides analog-to-digital wave

In the pursuit of energy efficiency, the lighting industry is undergoing a broad technology transition much the same way that consumer electronics already has.

The lighting industry is changing from analog to digital technologies, a move that could bring traditional semiconductor and IT suppliers into lighting, said Philips Lighting CEO Rudy Provoost.

Before heading the 117-year-old Philips Lighting business, Provoost was CEO of Philips Consumer Electronics, a position that gave him a good understanding of the digital world.

"Over time, as the shift from analog to digital technology continues, we will indeed see companies in the ICT (information and communications technology) world probably get involved in digital lighting," he said.

Philips Lighting

Potential new competitors would be Asian high-tech manufacturers or semiconductor makers, he said. "The question is not if but how. That landscape is going to change."

Philips is pushing hard into solid-state lighting, having spent about $4 billion acquiring LED (light-emitting diode) lighting companies over the past two years. Provoost this week is in the U.S., where some of those acquired companies are, including LED lighting firm Color Kinetics and Genlyte.

Energy-efficient lighting is one of the areas that is expected to benefit from a government-led stimulus package, which has provisions for retrofitting government buildings, schools, and municipal buildings.

Provoost said that LED lighting is far more efficient than alternatives--five times more than incandescent and halogen lights and at least as efficient as fluorescents--and they last longer than others.

The most promising areas in the short term for LED lighting are office buildings, shops, outdoor lighting for city "beautification" projects that use colored lights, and in consumers' homes.

But he said that Philips' strategy is to invest in energy efficiency across all the lighting technologies it sells.

"North America is an interesting case. If you look at the installed base of lighting, still two-thirds of the buildings are using light sources from lamps that are not energy efficient," he said. "This is an area where other technologies could change the landscape, with solid state lighting being a subset of that."

Too often, building designers and policymakers focus on energy-efficient lighting in new construction. Provoost, who is also chairman of Royal Philips' sustainability board, says retrofitting existing buildings would have a greater impact from an environmental point of view.

Philips Lighting CEO Rudy Provoost. Philips Lighting

"The issue is not available solutions. The issue is that the lighting industry, other industries, and policy makers have to have a thoughtful discussion and (take on the) moral responsibility (about energy use and the environment), which still isn't getting the attention it needs," he said.

Policy can play a role in getting energy-efficient LEDs to market faster, he argued.

One problem holding back LED lighting adoption is the higher upfront costs. Over the lifetime of a light (LEDs can last decades), an LED lamp will be more cost-effective because of lower energy consumption and maintenance costs.

"The value proposition is just rock solid...(but) we need to find ways to get people over the financial barrier," he said. "We'd love to see more urgency and courage from policymakers in coming up with smart schemes to stimulate efficient lighting, particularly the retrofit part of this opportunity."