Sharp Entering Home LED Lamp Market with Strategic Pricing

Jun 15, 2009
Yasuaki Nagahiro, Nikkei Microdevices
Sharp's new LED lamp to be released in July 2009
Sharp's new LED lamp to be released in July 2009
[Click to enlarge image]
Kozo Takahashi, executive officer and group general manager of the Health and Environment Systems Group of Sharp
Kozo Takahashi, executive officer and group general manager of the Health and Environment Systems Group of Sharp
[Click to enlarge image]

Sharp Corp will release LED light bulbs designed for home use in July 2009 in Japan. After entering the market for commercial lighting in 2008, the company is now breaking into the residential lighting market.

The main feature of the new LED lamps is their prices. There are no manufacturer's suggested retail prices, but their street prices in the market are expected to be about ¥3,900 (approx US$39.7) for the models equivalent to a 40W incandescent bulb and about ¥4,000 for the 60W-equivalent models. Thus, in terms of the price per unit time, the new lamps can now rival incandescent bulbs and bulb-shaped fluorescent lamps.

"In general, an incandescent bulb that lasts 1,000 hours is priced at about ¥100, and a bulb-shaped fluorescent lamp with a life of 6000 to 12,000 hours is sold at about ¥1,000," Sharp said. "So, an LED lamp with a life of 40,000 hours is priced at ¥4,000."

Thus far, LED lamps have barely managed to show their advantages over incandescent bulbs and bulb-shaped fluorescent lamps, taking into account effects such as lower electricity bills and less frequent replacement due to a longer life. It would be fair to say that the prices of the new products have a competitive edge without factoring in these effects.

Initially, Sharp plans to mass-produce the new LED lamps with a monthly output of 200,000 units. In the future, it intends to expand the product lines for both residential and commercial applications, and aims to enlarge its LED lighting business to a scale of ¥50 billion.

This time, Sharp will release a total of nine models. The 60W-equivalent models are the DL-L60AV, DL-L60AN, DL-L60AL, DL-L601N and DL-L601L.

The DL-L60AV (expected street price: ¥8,000) is equipped with a color adjusting function that enables users to change the color of the light by using the included remote control. The DL-L60AN and DL-L60AL are compatible with a dimmer (both being sold at an expected street price of ¥5,500). The DL-L601N and DL-L601L are the standard models (¥4,000).

The 40W-equivalent lineup is composed of the DL-L40AN and DL-L40AL (both at an expected street price of ¥5,400), which support the use of a dimmer, and the standard models "DL-L401N" and "DL-L401L" (¥3,900).

The DL-L601N, which is the brightest model among the 60W-equivalent models, has a luminance of 520lm with a power consumption of 8.6W, achieving a total efficiency of 74.7%. The 60W-equivalent models are equipped with six LEDs, and the 40W-equivalent models have four LEDs. The color adjustable model DL-L60AV has three white LEDs and three incandescent color LEDs. By changing the luminance of these LEDs, it is possible to adjust the color with the DL-L60AV.

The pricing for the new lamps is strategic.

"Instead of gradually cutting prices by ¥500 and then ¥1,000 after the release, we started with aggressive prices from the beginning," said Kozo Takahashi, executive officer and group general manager of the Health and Environment Systems Group of Sharp. "We are not going to reduce the price, at least not for the next one or two years."

In order to slash the prices, the company "focused on the cost reduction of components and materials, mainly cutting down on the cost of LEDs, power source and cavity," said Tsunehiro Momoi, division deputy general manager & department general manager of the Product Planning Department at the LED Lighting Business Promotion Center of the Health and Environment Systems Group of Sharp.

Although the company is currently procuring LEDs from other manufacturers, it is also considering using its own products in the future. However, it intends to use the most appropriate LEDs, irrespective of the maker of LEDs.

For the improvement of total efficiency, Sharp not just employed highly efficient LEDs but also made a series of efforts. Specifically, it reduced the power circuit loss, adjusted the power factor, optimized the heat dissipation design to prevent the degradation of LED efficiency and developed a diffusion coating material with a higher transmittance.

According to Sharp, the technology developed for diffusers in LCD backlights was applied to the diffusion coating technology. In addition, the company utilized the technique that was used to achieve a 74lm/W luminance for its commercial lighting equipment.