7.5 Highlights of Cree's LED Revolution
Cree, Inc. will soon sell its last Cree LED.
As announced on Monday, Cree, Inc. is selling its LED business to SMART Global Holdings, Inc. for $175M - $300M, depending on future performance criteria. With the sale of the business, Cree, Inc. will exit the lighting business altogether while the Cree brand's light fixture, light bulb and LED components products move forward with multiple owners.
The company's technical accomplishments are well documented. In 2008 their LEDs hit 150 Lumens Per Watt (LPW). In 2010, 200LPW. In 2014, 300LPW. To pay homage to Cree’s lighting contributions during the last 15+ years, we are posting our favorite and most notable aspects of Cree’s ascension from the perspective of business, marketing and strategy.
1. Cree Boldness
Cree proclaimed itself as “Leading the LED Revolution”
“Thank You Mr. Edison, We’ll Take it From Here” started a January 2011 press release announcing Cree's 60W replacement LED A-lamp.
The company touted its Cree LED Bulb as “The Biggest Thing Since the Light Bulb”
2. Cree Helped Educate the Masses
Non-lighting people, like our family, neighbors and friends, often credited the big-box retail merchandising displays by Cree and others that helped consumers make smarter light bulb decisions. Lighting laypeople learned to move away from an incandescent 60W, 75W, 100W mindset to a better-informed evaluation of lumens, color temperature and color rendering.
3. Forward Integration Strategy
(Warning: Massive oversimplification ahead) Cree started as a semiconductor materials company. Then Cree evolved into a LED chips and components maker. And then through its own development and through acquisitions, Cree became a leading maker of LED lamps and luminaires.
Forward integration doesn’t always work, as existing customers often get skittish about supporting a supplier that may eventually become a competitor. Cree faced some challenges along the way but navigated the waters and grew the business.
4. The LLF Acquisition: 2008
Credited for commercializing the first LED retrofit downlight (at around $100 each in 2008), the creatively named company, LED Lighting Fixtures (LLF), was acquired by Cree. While growing the category on the fixture side, the company also used the acquisition on the component side as "proof of concept" with luminaire manufacturers -- demonstrating that LEDs can successfully integrate into a high-performing replacement of legacy technologies.
5. The Ruud Lighting & Beta LED Acquisition: 2011
LLF was small enough that Cree’s lighting fixture manufacturer customers didn’t fret too much about the acquisition and potential conflict. But when Cree announced that it was acquiring Ruud Lighting for $525M, that sent a ripple through the industry.
- Cree’s lighting manufacturer customers competed with Ruud Lighting (and its successful Beta LED outdoor brand.)
- Ruud Lighting had a business model that bypassed electrical distributors. Stakeholders in traditional electrical & lighting channels objected to this rogue approach.
6. TV Commercial: "The Eulogy"
7. Lighting Technology Ambassadors
With many other LED components makers headquartered overseas, Cree helped drive mainstream awareness and excitement around LED Components and light bulbs in North America.
Every time a new lumens per watt threshold was achieved, Cree would announce it to the world with a disproportionate amount of celebratory pomp & circumstance. Mainstream newspapers weren't writing articles about HID lighting in the 90's and 00's. But they were writing about Cree's LED Revolution years later.
Above: Cree CEO, Chuck Swoboda, with President Obama in 2011. Source: https://obamawhitehouse.archives.gov
7.5 The Exit
- All "Big 3" light bulb brands (GE, OSRAM Sylvania and Philips) that Cree formerly competed against have exited the lamp business in recent years. Market shifts, accellerated adoption and race-to-the bottom pricing have created business dynamics -- among other factors -- that drove each of those companies to exit.
- Cree sold its luminaire and lamp business to Ideal Industries in March 2019.
- Cree will soon sell its LED Lighting component business to SMART Global Holdings.
- The Cree brand lives on in luminares and LEDs, but moving forward Cree, Inc. will focus on the remaining parts of its business, mainly Wolfspeed.
Don’t miss the next big lighting story…
Click here to subscribe to the inside.lighting InfoLetter