An LED arms race?

Both Home Depot and Lowes recently dropped their prices on their A-style LED bulbs. Home Depot dropped the price on their Cree 60-watt replacement LED bulbs to $9.97 (from $12.97). Lowes did similar by dropping their Utilitech 60-watt replacement LED bulb to $9.98 as well (from $10.98). Both bulbs are dimmable and have similar efficiency ratings (9.5 and 9.98 watts respectively).

But Lowes did Home Depot one up by introduce two nondimmable bulbs from Utilitech, one a 60-watt replacement for $7.98 and another a 40-watt replacement for $4.98. Realizing that not every application needs dimming capabilities, but people still love the efficiency, instant-on and instant-bright capabilities of LED, Lowes is clearly seeing an opening in the market. Previously, the sub-$10 market for a 60-watt replacement bulb has been pretty hard to find. And at less than $5, the 40-watt even more so. (Ikea does sell a 400 lumen bulb for $4.49, but Ikea is not as geographically available as Lowes or Home Depot.)

This is clearly where the market has been headed. Philips made a name for themselves in the LED market with its award-winning A-style bulbs. But they too have been introducing lower end models to win over general users as well. They introduced both the SlimStyle dimmable model, as well as a semi-directional, nondimmable model, both for just under $10. Both had deep criticism and they tried to trade off features for price. The SlimStyle was a great design in theory, but clearly-cut corners in technology gave it a noticeable CFL-style hum and the cheapness in quality was clearly visible. The semi-directional model made it ill-suited for many applications. And at $10, they didn't compete well with the omni-directional and dimmable Cree model.

In addition, Conserv-Energy at Costco dropped the price of their 60-watt replacement bulb from $10.97 to $8.97. The bulb competes very well in performance with the Cree, but at 13.5 watts, it's not nearly as efficient. Conserv-Energy has also been refreshing their bulb line, so perhaps they are clearing out their inventory in anticipation of a better performing A-style bulb.

And at $5, the 40-watt replacement is clearly a new floor. A similar model at Costco sold in 3-packs for $20, or $6.67 each. Unlike the $5 model, these are dimmable, but clearly the low price point is actually starting to compete with CFLs (which can cost $1-2 each).

It should be interesting to see where this goes. As designs become more simplified, and as chipset become more integrated, and as economies scale up, more and more people should enter the LED market, continuing to drive innovation and drive performance up and prices down. It should be very interesting to see exactly where this goes.