Triangle ama cree102011

MARKETING THELED REVOLUTIONOctober 20, 2011Greg Merritt

Who is Cree? • Headquartered in Durham, NC • Founded in 1987 by 5 NC State University graduates • Invented the “blue LED” in 1989 • Now >5800 employees (>2000 in Durham) Copyright © 2011 Cree, Inc. pg. 3

Cree: A Global CompanyR&D Manufacturing Sales•Durham, NC •Durham, NC •Durham, NC •Hong Kong•RTP, NC •RTP, NC •Racine, WI •Shanghai•Racine, WI •Racine, WI •Germany •Shenzhen•Santa Barbara, CA •Huizhou, China •France •Singapore •Italy •Japan •Turkey •Taiwan •United Kingdom •South Korea Copyright © 2011 Cree, Inc. pg. 4

Cree Company Mission LEAD THE LED LIGHTING REVOLUTION to obsolete energy- inefficient lighting

Track Record of Growth $1,100 LED Power & RF $1,000 $900 $800 $700 CAGR $600 23%Revenue $500($ Millions) $400 $300 $200 $100 $- FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 Copyright 2011, Cree, Inc. Copyright © 2011 Cree, Inc. pg. 7

The Market is Large and Adoption is Low Global Lighting Market Large LED Lighting Opportunity • Adoption is growing, but still low $108 Billion* • The tipping point is near, but Fixtures Outdoor** Outdoor ** disruptive technology requires Residential demonstrable end user Lamps Fixtures Commercial Industrial applications Commercial IndustrialResidential • Recent success has proven that a vast upgrade opportunity exists beyond the traditional market Our strategy is not to wait for the market, but drive adoption ourselves *Source: Freedonia Group estimate for 2012 (Excludes manufactured goods) / **Non-Building / *** Source: Philips Lighting Copyright © 2011 Cree, Inc. pg. 8

Why is Lighting important? • 2nd largest user of electricity behind Heating and Air Lighting conditioning 22% • For businesses, the percentage is much higher – up to 65% for retail stores US Electricity Usage* Widespread use of LED Lighting can cut electricity usage for lighting by up to 67% -- a 15% reduction in total U.S. electricity usage (1987 levels) *Source: U.S. Department of Energy Copyright © 2011 Cree, Inc. pg. 10

We’ve Seen This Before…. Vacuum Transistors Tubes 1940s – 1960s VHS DVD 1980s – 1990s Flat CRT Panel TV TV and 1990s – 2000s Displays Film Flash 1990s – 2000s Memory Light Bulbs/ Solid Fluorescent State Tubes Lighting 2000s – … Copyright © 2011 Cree, Inc. pg. 11

What Are the Barriers? • LED Lighting initial cost higher than traditional lighting in most cases – “sticker shock” • Willingness of Customers to accept Life-Cycle Cost Argument – “It’s good for you” • New technology – Fear of the Unknown – Risk of technology failure – Risk of financial failure – Don’t want to go first – “pioneers and arrows” • Acceptance or Belief of the Benefits Copyright © 2011 Cree, Inc. pg. 12

Higher Initial Cost – Financial Benefits Accumulated Upgrade Savings Using Cree Fixtures instead of CFLs• Education $15,000• Payback “calculators” $10,000 $5,000• Work through their #’s $-• Customer examples $(5,000) Years of Operation (50,000 Hours) Copyright © 2011 Cree, Inc. pg. 15

City of Los Angeles Number of street lights 140,000 being replaced in LA Total program cost $57 Million Estimated cost savings $10 Million/yr Estimated payback 6 Years Or period Less* Estimated energy savings 55%** Enabling the largest LED lighting retrofit undertaken to date*7 years initial target / **40% initial target Copyright © 2011 Cree, Inc. pg. 17

Do You Have a Track Record? 260 240 R&D Capability 231 LPW 220 200 208 LPWCool White (lumens/Watt) 180 186 LPW 160 161 LPW XM-L High Volume 140 Production 131 LPW 3 yrs XP-G 120 HID XP-E 100 XR-E Fluorescent 80 XR-E 60 CFL 40 LED 20 Incandescent 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Copyright © 2011 Cree, Inc. pg. 20

LEDs Last a Long Time…. LED Lighting product warranties of 3 years, 5 years and 7 years depending upon product type Well-designed systems with Lighting-class LEDs at low TA, TJ will run a very, very long time…Copyright © 2011 Cree, Inc. pg. 25

Lifetime of 50,000 hours is: 137 Years at 1 hour/day 68.5 Years at 2 hours/day 34.2 Years at 4 hours/day 22.8 Years at 6 hours/day 17.1 Years at 8 hours/day 11.4 Years at 12 hours/day 5.7 Years at 24 hours/day A very long time…. Copyright © 2011 Cree, Inc. pg. 26

Key Component – Revolutionary Tone • A little irreverence or cheekyness • Not take ourselves too seriously - Anti Al Gore • Challenge the staid and the traditional • It is a revolution, and some people are going to get hurt • Have a little fun… Copyright © 2011 Cree, Inc. pg. 37

Benjamin Moore Paint Store – Staunton, Va. BEFORE AFTER 18 CreefluorescentTroffers 28 T12 CR24 LED tubes 792 total watts consumed – 65% savings 2,240 total watts consumed Copyright © 2011 Cree, Inc. pg. 39

Red RobinReplacing Incandescent and Halogen lamps withGE LED technology as part of an interior lightingretrofit program in 274 restaurants • 77% energy reduction per lamp • Lasts more than 6x longer than previous types Courtesy of GE Lighting Copyright © 2011 Cree, Inc. pg. 43

Thank You! Greg MerrittGreg_Merritt@cree.com (919) 407.7836

Triangle ama cree102011

by Triangle American Marketing Association

Accessibility

Categories

Upload Details

Usage Rights

1 Embed 55

Statistics

Triangle ama cree102011 Presentation Transcript