Center City Philadelphia "simply does not have enough hotel rooms" to handle this week's 24,000 engineers, bosses, dealmakers, marketers and other light-dependent business and tech folks jamming this week's Lightfair conference, complains Jonathan "Jed" Dorsheimer, stocks analyst at Cannacord Financial Inc. in Boston.
He's in town this week for the yearly conclave of lighting and electronics companies, which make, among other things, cool stuff from light-emitting diodes (LEDs) that we keep hearing will Change The Way We Live, eventually.
Despite the crowding (some folks had to take rooms out in the burbs), Dorsheimer plans to lock bosses from LED manufacturers and big commercial users into Pennsylvania Convention Center halls and restaurant rooms, "fill them up with some of the best food and wine the city has to offer and make them sit through impassioned speeches of where the industry is headed." Lightfair alternates between the East and West Coasts, with Philly landing the past two Eastern shows, and maybe the next in 2015.
You'd think LED makers would be hot, what with the U.S. joining other developed-country governments in pushing manufacturers to phase out Thomas Edison's old incandescent bulbs and bright but toxic halogen-gas bulbs by Jan. 1. "Eight months," says Dorsheimer. "You already see it in California."
Well, won't that just result in Americans buying crates of mini-fluorescent lights at Home Depot and Rite-Aid? "Our thesis is, people who are used to what skin tones and objects look like under an incandescent light, won't want the very poor quality of cool, unnatural light that's inherent to flourescent technology," Dorsheimer says. (As if he were channeling old Charles M. Cawley, the Delaware credit card mogul who scrapped flourescent lights and filled MBNA Corp. ladies' rooms around the nation with retro incandescent bulbs, so the predominantly female hourly workforce would think they looked nice enough to head right back to dunning borrowers over the phone after their restroom breaks.)
But incandescent is no longer an option; that leaves LEDs, which are expensive. "People used to paying 60 cents for an old-style light bulb might find it easy to pay $2 for a compact flourescent," but only some of those "might be willing to pay extra" for longer-lasting LEDs -- and only after the price gets under $10 -- which makers like Dutch giant Phillips and North Carolina-based Cree Inc. say might happen as soon as this coming winter, according to Dorsheimer.
Incandescent doom, plus flourescent ugliness, "will start the wave" -- but that's not really news: Billions of today's installed and stockpiled bulbs won't be replaced for years. LEDs already power thin televisions, hand-held telecom and computing appliances. Indeed, LEDs are such a good idea they've already boomed and busted: Some LED factories in China stand empty for lack of orders. Manufacturer Cree's shares trade around $50, down from highs in the $80s three years ago. Rival Aixtron of Germany trades around $13, down from over $40 in 2011. Veco, of Plainville, N.Y., is around $32, down from over $50 in 2011. Locally, Universal Display Corp. of Ewing, N.J., is around $30, down from $45 just last year.
So bulls like Dorsheimer are looking ahead -- years ahead -- both to the purported medical and studying-comprehension benefits of more-natural LED light, which look promising to marketers -- and also to the ways"smart-socket" LEDs can be digitally manipulated, not just to shut off and save power when no one's around (Cannacord estimates one-sixth of U.S. electricity is used for artificial lighting, with much of it wasted), but also to track store customers when they're looking for bargains, influence students', patients', shoppers' or prisoners' moods (colors, some scholars have said, can calm or excite, help confuse or focus), and for emerging commercial purposes.
Like: "The medical marijuana industry is a great example of a new application rapidly accepting LEDs due to the ability to spectrally tone the light in order to achieve optimum THC [psychoactive tetra-hydra-cannabinol] levels and turn each plant more frequently, rendering greater profits," Dorsheimer told clients in a recent report to clients.
"Once you go to an LED, it has the ability to have its own Internet Protocol address," Dorsheimer told me. "Old lighting was binary. It's on, or it's off. But these, with the existing infrastructure, you can send signals. Once you digitize the home, you gain control over that last mile. Power generators can optimize that. they can maximize their profits with this technology."
Where does that go? The ex-factory city of Chattanooga, Tenn. has allowed vendors to build an LED grid where a police officer on the beat can control the streetlights, where lights can sniff the air for meth-lab chemical odors, or listen for gunshots, Dorsheimer says.
Multiply that out over many experiments, much investment capital, many smart people, and "this is like the PC," or digital video and music replacing analog, Dorsheimer enthuses. "It's not an overnight sensation. It's going to take years... As new applications come online, we predict that total growth in LED demand will increase at least through 2020," and maybe way beyond, if this government mandate turns into a stimulus for another generation of digital gadget growth and ingenious manipulation of the people's wants, fears and needs.