Phillip’s “L Prize” Winning Light Bulb Goes on Sale for $60

In 2007 Congress launched the “Lighting Prize” competition in order to replace 60W incandescent bulbs and Phillips was the only entrant. Four years later in 2011, Phillips won the $10 million award after its bulb was sufficiently tested. Made with high quality diodes this bulb uses around 10W of power and lasts for about 20 years (when used four hours a day). The bulb is the world’s first LED Standard Type lightbulb and went on sale Sunday, April 15 for the steep price of $60 for consumers. Phillips is also offering a manufacture discount of $10, brining the online price down to $50; and is working out several deals with utilities companies which would discount the bulb down to $20-$30.

Even at this price though, although the Phillips bulb competes with its 60W incandescent counterpart, it doesn’t stand much of a chance against compact fluorescents (CFLs), which have already rendered the incandescent nearly obsolete. The LED bulb competes against CFLs, which use only 15W for 60W of light and only cost about $5. The only advantages it has to offer is the fact that it lasts three times as long, doesn’t contain hazardous toxic mercury vapor like CFLs, and has more natural looking light.

More natural looking light may be the only thing this bulb can bank on, when considering the federal ban on 100W and above incandescents which began this year, and the 2016 ban on 40W and up incandescents. The next goal is to come up with an LED bulb that produces 100W of light, which will be a huge technical challenge. This leaves us all wondering, is this goal worth pursuing?

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4 Comments

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4 responses to “Phillip’s “L Prize” Winning Light Bulb Goes on Sale for $60

  1. selmster

    1)http://www.usatoday.com/tech/news/story/2012-04-16/philips-light-bulb/54321662/1
    2)http://www.lightingprize.org/overview.stm
    3)http://green.blogs.nytimes.com/2011/05/16/philips-brightens-its-led-lineup/?ref=koninklijkeroyalphilipselectronicsnv

  2. danielnoll

    I think it’s an interesting question to ask: at what point are efficiency improvements not worth the return on investment? For consumers, the question is about a) return on investment and b) any other “positive externalities” that the consumer values. Since these light bulbs last 3 times as long as the CFL competitor models, I could see consumers with long time horizons (such as industrial or commercial users) potentially justifying a price tag 3 times as high. For producers (in this case Phillips), there are several reasons why pushing the envelope in incremental innovation could be of value. Such as:

    1. Capture of first-mover advantage in new markets
    2. Creation of spillover benefits that may benefit other investments made by the company
    3. Development of the internal absorptive capacity to react to new market opportunities and technological innovations
    4. Enhancement of the company brand

    So basically I’m saying that the behavior of Phillips could be justified in a number of different ways, not least the $10 million prize they were able to win. Over time, as the technology advances along the S curve, the price will invariably drop through improvements in production efficiency and learning by doing. The market for lighting is large and there is certainly demand for improvements in efficiency, especially while governments continue to ratchet up standards. I think the key for a company like Phillips will be to capitalize on its global market position to enter markets with a first mover advantage. That’s hard to do with a $60 price tag, but time will tell if their strategy yields benefits.

  3.  lighthouse

    No wonder the price is high, given all the money they have to claw back!

    The truth about that Philips bulb, and how Philips won the prize:
    The lobbying, the evading of rules, the poor quality of the bulb on
    testing – as referenced with competition rules, patents, lobbying
    finance, lab tests etc
    http://dunday.com/2012/03/lots-of-public-money-for-doubtful.html
    .

  4.  lighthouse

    RE selmster “This leaves us all wondering, is this goal worth pursuing?”
    RE danielnoll there is certainly demand for improvements in efficiency, especially while governments continue to ratchet up standards
    – yes that would be governement demand!

    There is a lot of deception being used to justify the ban, as referenced
    http://dunday.com/p/deception-behind-banning-light-bulbs.html
    – but a ban which of course offers profits to manufacturers who sought
    and welcomed it (why welcome being told what you can make? 😉 )

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