Strategically Blogging

Laser Choices Improve Along with Laser Specs

Allen Nogee 03/18/2015

Having just finished all the forecasts and estimations of the recently released report, The Worldwide Market for Lasers 2015, this is the time I step back and look at last year’s laser market in retrospect. It is quite common for industry analysts (myself included) to attempt to “fit” a market they are investigating over other markets which have proceeded it. This is a part of normal human experience - mapping the unknown to what they do know. Unfortunately, what I have found from my experience in technology, 30+ years actually, is that no technology really duplicates another in evolution, no matter how much they may appear similar at first glance.

Key Takeaways from the 2015 China LED Signage Show

Martin Shih 03/16/2015

Strategies Unlimited was invited to present at one of the world’s biggest LED Signage Shows, giving an overview of the worldwide LED signage market and trends for 2015 during the conference. We will also update our signage market data in our upcoming report, “The Worldwide Market for LEDs 2015,” which will publish in April. Although this conference was held right after the Chinese New Year Holidays, which led to fewer attendees than 2014, we still saw all the major LED signage suppliers demonstrate their latest LED signs and outdoor/indoor displays for 2015. 

What is new in the SSL Lighting Industry: Recap of Strategies in Light 2015

Shonika Vijay 03/10/2015

Strategies in Light had yet another successful year of conference and exhibition in Las Vegas two weeks ago. The conference started off with informative workshops and a captivating investor forum showcasing start-ups such as Orama, RayVio, LUXeXceL, LumaStream, Nordic Power Converters, Transphorm, Fusion Optix, Stack Lighting, QuarkStar, and ecoSpectral. The now established company, Cooledge, also reminisced on their first debut at SIL U.S. a few years ago and their journey to becoming a recognized company in the SSL Industry. Here are a few highlights from the show:

Highlights of DOE Solid State Lighting R&D Conference

Shonika Vijay 02/09/2015

Recently, we had the DOE R&D conference in San Francisco. As always, it was a great event as the key industry players and decision makers came under one roof. I wanted to share some of my highlights and experiences from the event. Before that, one of the treats for me was looking at the new Bay Bridge from the shores of Treasure Island. Though I am a Bay Area resident, I regret that I hadn’t done this before—I usually just drive through it. The Bay Bridge looked magnificent, as it wore jewels of LED lights. The directionality of the lights was brilliant and it limited light spillage into the bay. So thank you, DOE, for allowing me this experience.

What does LG Chem's "5 lm/$" really mean for lighting?

Stephanie Pruitt 02/05/2015

LG Chem came out this week claiming to have the world’s highest OLED lumen-price ratio at 5 lm/$, but what does this really mean, and how does it compare to traditional and LED lighting?

To really see how this ground breaking development in OLED lighting compares, I have listed below the average selling prices (ASPs) for the general lighting luminaire form factors that Strategies Unlimited believes OLEDs can potentially penetrate: downlights, troffers, and suspended pendants (we do not believe OLEDs will play in track lighting, high bay, or street lighting due to current lumen output, efficacy, and price).

Those lousy laser company margins

By Tom Hausken
Ever really looked at the margins earned by laser companies? And then looked at margins for companies like Cisco or Google? It's enough to make you weep.

Industrial laser company margins are modest but steady. The net profit margins for the industrial laser companies aren't too bad. Since 2006, gross margins on annual sales for Coherent , IPG Photonics , Newport , and Rofin are mainly in the 40-50% range. Operating margins range from single digits to 30-some percent. The net profit margins are mostly single digits to low teens (Coherent, Newport, and Rofin), while IPG is running lately at about 23%. Trumpf , which sells much more in machine tools than it does merchant lasers, used to have about 9-10% net profit margin, but suffered in the downturn and has recovered in the last fiscal year to 6.7%.

All in all, that's decent It's the telecom component suppliers that are really hurting.

Telecom supplier margins been mostly underwater until only recently. For Finisar , JDS Uniphase , Oclaro , and Opnext, the gross margins are lower, but it's the operating margins and net profit margins that are in the tank. Like, pretty much negative values for annual revenues since 2006. There's some improvement in the last year or so, with positive operating and net profit margins.

Now I know that these numbers are fraught with "yes, buts." These companies are generating cash flow, but their official, GAAP, unadulterated income statements show losses. And a company like JDSU is in multiple businesses. I'm lumping everything together.

Meanwhile, the customers reap the benefits. Now look at the customers. Cisco has gross margins in the 60% range, and net profit margins around 15-20%. That's net. EMC's net margin is running 12% this year. Juniper is 13%. The carriers aren't doing too badly either. AT&T is consistently in the teens and Verizon is in the single digits. And get this: Google's net margin is a running a whopping 27%!

So we know who is getting the margins. It's not the components companies. Nor is it Alcatel-Lucent or Ciena, who have had consistently negative margins too. It's the router and storage companies like Cisco and EMC, and the equipment users like Google and AT&T.

The component suppliers may finally be in positive territory for good. I hope so. It's not right that the customers get margins while the components companies don't.

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