Strategically Blogging

GE Plans to Stop CFL Business

02/01/2016

Since the bans on inefficient light bulbs have been happening around the globe (including in the US starting in 2012), it has made sense that lighting manufacturers have been slowing down on the production of incandescent and halogen bulbs – the least efficient types of bulbs. CFLs were the replacement bulb of choice across many markets, with LEDs making a slow start due to much higher prices. Now, however, we’re beginning to see the shift away from CFLs as well. 

The 2016 Smart Lighting Market

Shonika Vijay 01/27/2016

The hype of the connected lighting or smart lighting or networked lighting or even IoT of lighting has spread throughout the lighting industry as well as the network and technology companies. Nontraditional lighting companies such as SAP, Google, Cisco, Apple, and Microsoft are targeting the lighting landscape through network infrastructure familiar to them and are also partnering with existing lighting players such as Acuity, Philips, Osram and etc. who are familiar with the end-users and regulatory demands of the market.

In the Year of Light, Lasers Started To Really Shine

Allen Nogee 01/19/2016

As everyone is aware, Strategies Unlimited is the leader in both laser research and LED lighting research, and rarely do the applications of these two widely different light “sources” usually overlap. Lasers can be used for illumination tasks such as semiconductor inspection where a laser illuminates a semiconductor wafer when one looks for defects, but when it comes to general illumination of white light used by us humans for vision, this task almost has always been the domain of LEDs, or at least it has until very recently.

Laser Outlook For 2016

Allen Nogee 12/16/2015

There is some fair debate going on now as to whether our worldwide economy is on an upswing or a downswing. But does this really matter to the laser market?  

When Economic Justification of Connected Lighting Becomes Difficult

Shonika Vijay 12/08/2015

Making decisions to change the lighting system of a business are currently conducted by evaluating the listed economic metrics and then deciding if the business will reap tangible benefits for implementing the changes... While connected lighting has been proven to add tangible benefits such as reduced energy consumption there are other nontangible benefits that may be onerous to prove through current economic parameters. 

Consolidation, Part 2--Is Oclaro consolidation or redistribution?

By Tom Hausken
So Bookham and Avanex finally merged, forming Oclaro . This is a sign that the industry is consolidating, right? Reducing the number of suppliers by one, yes. But it may just amount to moving market share around, and not necessarily to fewer players.

Bookham and Avanex don't have greatly overlapping product lines. And the new management claims it will continue manufacturing parts the way it has been. That is, it will keep the Bookham fabs and its Shenzhen facility but will also keep using Fabrinet as Avanex did.

The company points out that now they have a wider range of products to compete against bigger competitors, like JDS Uniphase and Finisar. I've never fully believed the one-stop-shop argument though. Of course, Cisco and any other customer would like to reduce its list of suppliers. But the customers also want suppliers to be competitive, and they want the best products they can find, provided that the supplier is qualified. Grouping products into one company doesn't necessarily make Oclaro more competitive in those products.


There will certainly be some synergies gained from consolidating various functions, such as procurement and corporate overhead. The figure shows Oclaro's vision of the gains it can make in gross margin from the merger. One of the bigger synergies would be the use of the Bookham fabs to supply chips for Avanex products. This is a change in market share, shifting sales from the former suppliers (such as JDS Uniphase) to Oclaro, possibly improving Oclaro's factory utilization. It might also steal some margin from contract manufacturers.


Source: Oclaro


That may turn out real good for Oclaro, although it doesn't necessarily constitute consolidation if it just spreads market share more evenly among some of the bigger players. Without knowing how it plays out product by product, it could actually increase competition and reduce consolidation in some segments.

Oclaro's CEO Alain Couder notes that the company also gets to spread Bookham's credit line over a new balance sheet that is low in debt and with a nice chunk of cash. That's never a bad thing, for Oclaro. And despite claims to the contrary, the management may make more moves once the excitement has died down. Anything that tips the scales dramatically in Oclaro's favor would essentially increase consolidation, even if the number of suppliers is nominally the same.

This may turn out real good for Oclaro. But I wouldn't call it industry-scale consolidation. Not yet.

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