Market Insight

New IKEA smart lighting challenges Philips Hue

April 30, 2018

Paul Bremner Paul Bremner Principal Analyst, Critical Communications

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  • IKEA has added a color-changing bulb to Trådfri, its smart lighting line.
  • The market for color-changing radio frequency (RF)–enabled LED lamps topped $122 million in 2017, almost twice the size of the single-color RF-enabled lamp market.
  • Unit shipments of single-color RF-enabled LED lamps are expected to sell around 7 million more units in 2018 than color changing RF-enabled lamps.
  • The addition of a color-changing bulb to its lineup brings IKEA’s smart-lighting offering into direct competition with Philips Hue.

Our analysis

IKEA has added a color-changing bulb to its smart lighting line, Trådfri. This addition is currently being sold as part of a dimming kit, which contains a bulb, a dimmer and a battery for the dimmer. It is not yet known whether these color-changing bulbs will be sold separately, like the current Trådfri white color bulbs, or whether the motion sensor and gateway kit will be made available with the color-changing Trådfri bulb.

If IKEA does decide to sell its color-changing bulb in one of its gateway kits, it would position their offering to compete directly with the current leader of the market, the Philips Hue smart lighting kit. Until that time, IKEA’s addition remains an add-on to its existing kits. With both offerings compatible with Amazon Alexa, Google Assistant and Apple HomeKit, the difference may simply come down to a combination of price and consumer preference.

The latest data from the IHS Markit “LED Lamp Retail Price Tracker” from April 2018 reveals retail prices of non-RF LED lamps have fallen 54.1 percent in the past 12 months. While these RF-enabled smart bulbs are not as price sensitive as their non-RF equivalents, this pricing pressure is still felt, and it is an arena in which IKEA seems to believe it can compete on equal terms with Philips Lighting.

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