Future’s future: Let there be LED
Michael Parada has the distinction of being the Future Electronics employee with the most valuable basement.
Now a separate subsidiary, Future Lighting Solutions was essentially born in Parada’s basement when he converted the first standard lights for the interior cab of a Volvo and retrofitted it with LED lights.
“I took the existing lights, and gutted everything, and replaced them with LEDs, and sent it back to the customer. The customer said, ‘this is fantastic,’ and placed a $100,000 order.”
Parada is the lead researcher of Future Lighting Solutions – a company born out of a partnership in 2000 between Future Electronics and Philips, the company that produced the world’s first power LED.
Experts say power LEDs are poised to replace all the lighting in commercial, industrial, and institutional spaces within the next five to 10 years.
“Within five years, I think this will become a mainstream consumer product worldwide,” said Susie Inouye, research director and principal analyst at the Reno, Nev.-based market research company Databeans Inc. The company’s research shows the LED market will grow by 20 per cent annually, reaching $17.4 billion by 2015.
Future Lighting Solutions calls itself a lighting enabler.
It doesn’t produce the components or the lights, rather it figures out how to adapt the new technology to replace conventional bulbs, and acts as a distributor to sell the necessary parts.
Future technology could be the cause of your next speeding ticket.
It’s being used to make Montreal’s police cruisers more inconspicuous with a small horizontal bar of red and blue flashing lights inside the car, rather than the large lights fastened to car roofs. Future also had a hand in creating the new Times Square ball, which was first used in 2008 New Year’s Eve celebrations. Several new developments in China also use LEDs in their street lamps.
It took four years for the lighting division to become profitable, but now, Future is poised to benefit from what’s expected to be a tremendous growth market. From 2000 to 2007, Future had 100 per cent market share of the power LED market, but more recently that share has diminished as other players got into the game.
Part of the reason for the popularity of LEDs is that they last 50 times longer than incandescents, and they’re more efficient. While regular light bulbs radiate heat, a very inefficient use of energy, LEDs produce less heat, and the heat can be harvested and used more efficiently.
Jamie Singerman, corporate vice-president for Future Lighting Solutions, said the technology is a no-brainer for grocery stores to use in their freezers, because not only will the lights last longer, but it will require less energy to run their freezers, since the lights aren’t a significant source of heat.
Power LEDs are also programmable. They can change colours, and be controlled remotely, so they’re already popular among entertainment companies, which use them to decorate rooms for parties.
However, most companies converting to LEDs have trouble adapting to the new technology, because it requires using and adapting semiconductors. That’s where Future comes in.
“Many of our customers in the lighting business don’t buy semiconductors,” Singerman said. “Their core competency is metal
Some day, “we will be the lighting company that does business in electronic components.” LINDSLEY RUTH, QUOTING ROBERT MILLER
bending and fixture design, not light-source design. What this has created is a need for them to build the light bulb effectively, and many of them couldn’t build the light bulb.
“This is a perfect fit for us, because we leverage all the semiconductor technology and understanding that we have (from Future Electronics).”
Future Lighting does the job of retrofitted traditional light sources and light fixtures to LED technology, and then passing on that knowhow to its customers. On the day Parada was showing off his lab, he had just replaced a fluorescent ceiling light with LEDs.
Singerman said the business has been growing rapidly, as the price of power LEDs has decreased. He said it now takes about two years for heavy users to see the payoff from changing standard lights with LEDs.
Innouye, however, said the prices are still a bit high for full-scale adoption of LEDs.
“Right now, if you go to Home Depot, you can buy an LED bulb for $20. That price needs to get down to around $5 before it becomes interesting for consumers to use them in their homes,” she said. “The problem right now is that there isn’t enough capacity in the world to produce these things, so the price is still quite high.
Future’s founder, Robert Miller said going into the lighting industry was a tremendous risk at the time, because it wasn’t obvious this would become a mass market product.
“We invested $27 million into this, which was quite risky,” Miller said. “In fact, it turned out to be a great decision.”
The lighting division is the fastest-growing part of the company, said corporate vice president Lindsley Ruth.
“Sometimes Mr. Miller will say, ‘down the road, we will be the lighting company that does business in electronic components,” Ruth said. “That’s a potential.”