Following the "selling" of Osram and Philips, another international lighting giant GE has recently reported that it will fully withdraw from the Asian market. GE's hasty retreat not only brought a lot of confusion to Chinese dealers, but also set off a huge wave in the lighting industry. For a time, the dispute over the future development of international giants is rampant.
In today's booming LED lighting industry, why did the international lighting giants leave? What is behind the departure from the field? Why are Chinese LED companies doing "Pan"?
After Samsung Electronics announced the suspension of LED lighting business outside Korea in 2014, another multinational company announced that it would stop some regional business expansion. This time it was the GE lighting that was one of the three giants of traditional lighting.
In September, according to a person familiar with the matter, GE Lighting CEOBillLacey said in an email to its employees that GE Lighting will terminate all direct commercial activities in Asia and Latin America from November 30th, thus making GE Lighting highly focused. Win and consolidate its market position in North America, Europe and the Middle East, and continue to scale up and improve profitability.
The news of GE's exit in the lighting industry "a stone provokes a thousand waves." However, the storm of GE's retreat has not yet subsided. The news that China's Sanan acquired Germany's Osram and the American Apollo Group took over Philips Lumileds came out one after another, shocking the lighting circle.
On October 6, according to Germany's "Der Spiegel", mainland chip maker Sanan Optoelectronics plans to acquire German lighting company Osram for 7.2 billion euros (about 8.1 billion US dollars), and plans to make an offer before mid-October.
Industry insiders may also be immersed in the LEDVANCE incident of China's Mulinsen Group's acquisition of Osram, and a new round of sales will follow.
As early as 2015, OSRAM has separated its general lighting business and established itself as a new company, LEDVANCE. On July 26, 2016, OSRAM officially agreed to sell LEDVANCE, a newly operated lighting business company, to Mulinsen and other bidding consortiums, and accepted bids of more than 400 million euros (about 439 million US dollars). The purchase price.
In addition, according to foreign media disclosure, Philips is negotiating with the American Apollo Global Management Company to sell Lumileds business assets. It is reported that the Apollo Group has also participated in the 2015 bid for Lumileds.
As early as March 31, 2015, the Chinese and foreign syndicates led by GOScaleCapital reached an agreement with Royal Philips of the Netherlands to acquire the 80.1% stake in Lumileds, a subsidiary of Royal Philips. The transaction was valued at approximately $3.3 billion, while Philips held the remaining 19.9%. Although the deal was rejected by the US Foreign Investment Committee on the grounds of “national security concerns,†it did not seem to shake the determination and plans of Philips’ sale, and he is still actively seeking new acquirers.
Focus on high-margin areasTime and time again, and round-the-clock mergers and acquisitions, people can not help but wonder, what happened to the international giants? Is LED lighting unprofitable? Is the sale of the giants forced to withdraw or a prelude to the transformation? We may wish to take a peek at the recent actions of the big coffee.
On August 17, Philips Lighting released its lighting strategy plan at the 2016 Media Conference in Beijing, clarifying that the next major development direction is in smart interconnection. It is understood that the current Philips lighting business covers outdoor, retail and hotel, office industry and home lighting, providing a full range of lighting solutions from light sources, lamps, products, systems to services. Today, with the rapid development of the Internet, Philips will promote the development of the Internet of Things in the lighting industry under the premise of energy conservation and environmental protection.
According to the report, at the media conference, Philips Lighting publicly demonstrated its latest intelligent Internet LED lighting system and products in the Internet of Things era, bringing the full range of home intelligent lighting systems, Philips Hue, to the event site. Obviously, in the current mature environment of smart homes, Philips intends to enhance industry leadership in the Internet of Things era through product, system and service innovation.
"With the maturity of LED technology, Philips Lighting is changing from selling products to selling services. We actively adapt to the new normal of the development of the lighting industry, constantly adjust the development strategy, and transform into a service provider that provides high added value." Philips Lighting Wang Haoru, president of Greater China, said.
Siemens also tried to divest low-profit or growth-promising businesses and separated lighting manufacturers in 2013. The analysis pointed out that after focusing on industrial applications such as high-speed trains, medical equipment and products, the sale of the remaining shares of Osram will reduce Siemens's remaining consumer-facing assets by one. Osram has cut more than 7,800 jobs due to the spin-off, and in July it agreed to sell its general lighting business to a Chinese consortium including Mulinsen for 400 million euros to focus on buildings, cars and cities. Lighting technology.
In addition, giants including Osram and Philips are also increasing their efforts to develop the indoor positioning lighting market.
GE also has its own plans. In February of this year, GE Lighting decided to phase out CFL (compact fluorescent) bulbs sold in the United States in the next year, replacing them with LED bulbs. The company's spokesperson said in a statement: "In the future, GE Lighting will be fully focused on innovation and LED technology. By 2020, LED lights will account for half of the US market and 80% of global lighting revenue will come from LEDs."
As can be seen from the above statement, similar to Philips Lighting, which is also an international giant, GE Lighting pays more attention to the development of smart internet technology while improving the penetration rate of LED market, and gathers more resources in the industry chain in the process of business transformation. The high-end part of the smart lighting.
Crisis and opportunity coexistIt is not difficult to see from the actions of the giants that Philips, Osram and even GE Lighting will only give up the low-end lighting market, and in the future, they will put more resources and energy into the high-end market. For many peers, the giants' withdrawal is due to the loss of advantage and competitiveness, and the future LED leadership will be in the hands of Chinese companies. The author believes that the giants who are brave enough to "break the tail" will completely subvert the lighting industry.
It is true that the series of adjustments carried out by international giants are not unrelated to the "rise" of China's LED industry. In fact, China, which has the world's largest LED lighting production and application market, has quickly occupied the world LED market with its low cost and high efficiency, and brought huge impact to traditional giants. This is from CREE's sale of its power and RF business subsidiary Wolfspeed to focus on LED technology innovation.
After the decline in lighting products revenue in the previous fiscal year, total revenue for CREE in fiscal 2016 was $1.62 billion, down 1% from the fiscal year 2015. The 2016 fiscal year (GAAP) net loss was $22 million.
For CREE, the challenges brought by the Chinese market are also enormous. At the moment when Chinese local chip companies such as Sanan and Huacan are catching up, the CREE, which was once running at high speed, is hard to get rid of the dilemma of slowing growth. What is more challenging is that in recent years, China's local LED companies have set off a wave of overseas acquisitions. This is likely to bring more challenges to many multinational companies that have the advantages of technology, patents and overseas channels.
But we can't ignore the fact that China's LED is currently short-term and lacking in technological innovation, patent blockade and brand. China's advantage lies in "manufacturing" rather than "intellectual creation." Although the acquisition of overseas targets can make up for some shortcomings, the integration, management and branding capabilities after the acquisition are still not optimistic.
Therefore, the withdrawal of international giants is undoubtedly a "double-edged sword" for Chinese LED companies. On the one hand, China has taken the opportunity to win the technology, patents and even channels of foreign LED companies; but on the other hand, it is not allowed. Do not face the competition of high-end markets for giants who are good at breaking the market with technological innovation.
In the future, the “river and lake†of the LED lighting market is still a technical competition and an innovative game. Only technological innovation is the eternal driving force for industrial development.
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