An LED bulb's efficiency is directly related to how it generates light. With an incandescent bulb, electricity heats a filament for illumination, with some energy spent on unwanted heat.
Commercial Systems
With an LED, connecting an electric power source to a lamp stimulates electrons in a semiconductor chip so that they move, giving off light.
Because efficiency lies in the LED package and how it's configured, GE is concentrating on system designs for its commercial customers rather than making the LED equivalent of an incandescent bulb. It's relying on suppliers such as Cree Inc. for the semiconductor chip.
"Our expertise is in how you put the whole application together and configure it for a key application," Sylvester said.
In the commercial lighting segment alone, LED illumination may make up 52 percent of the market by 2021, Pike Research forecasts. The market may reach $42 billion this year and peak at nearly $54 billion in 2012 before gradually declining to about $30 billion by 2021 as usage of the longer-lasting systems increases.
GE, Siemens
Because industry leaders such as GE and Siemens face competition from newer Asian companies manufacturing the systems less expensively, they must reduce LED prices to win in the market, said Konkana Khaund, the industry manager for market researcher Frost & Sullivan, which assesses lamp and lighting markets.
Some traditional manufacturers now charge as much as $200 for a product low-cost producers flood the market with at half the price, she said.
"The LED market is a hyped market," Khaund said, referring to forecasts from a broad range of sources.
GE's experience in the lighting business, as well as the breadth of its customer base and product lines, gives the company an edge, Sylvester said.
"We have the opportunity and the challenge to think broadly about lighting," she said. "Over the long run, that's going to help us win. Customers want one partner."