Lighting, like everything else, has gone digital. Instead of creating light with wires and gas inside a hot enclosure, we now use semiconductors known as light-emitting diodes, or LEDs. Diminutive and durable, they’re a far cry from Edison’s incandescents—and they’re enabling a lot of competition. Soraa, a lighting company founded in 2008 by Nobel Prize in physics winner Shuji Nakamura, sells commercial lights to California Pizza Kitchen and Starwood Hotels. Ketra, a six-year-old startup, provides lighting for the Art Institute of Chicago and Tiffany & Co
The rapid shift has the incumbents scrambling. In March, Philips announced plans to sell its LED component-making division. Siemens spun out Osram through an initial public offering. Rumors suggest that GE’s lighting division could be for sale. (The company denies it.) “The rapid transition to LEDs has caught the major manufacturers a bit unawares,” says Will Rhodes, a market researcher at IHS Technology. “Their traditional business is falling faster than their LED business is taking off.”
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