As electrical distributors, independent manufacturers' reps and electrical manufacturers try to figure out what roles they will play in the rapidly evolving market for light-emitting diodes (LEDs), they will soon run into a new kid on the block.
Arrow Electronics, Melville, N.Y., is the second-largest distributor of electronic components in the world and like any other distributor, it's always looking for profitable new market opportunities. The $13-billion company identified LEDs as just that type of new business venture. In early 2006, Arrow Electronics set up the Arrow Electronics Lighting Group as part of its North American Components business to focus on distributing LED components to original-equipment manufacturers (OEMs) that build LEDs into products such as automobile headlights, computer displays, airplane exit lights, cell phones, general lighting applications and a myriad of other products and applications.
Lighting companies in the electrical wholesaling industry should take note of Arrow's foray into general-lighting applications, because when a global distributor with $13 billion in 2006 international sales, 12,000 employees and 260 branches takes an interest in the fastest-growing region of the lighting world, they may indeed be a force to be reckoned with. It's tough to say when or if Arrow Electronics will be friend or foe for electrical distributors, reps and manufacturers with an interest in LEDs, but there's no question the company quickly moved into the neighborhood. The company has already announced distribution agreements with some of the big names in the LED market, including Color Kinetics, Boston, and Cree Lighting, Raleigh, N.C. While many of the other names on Arrow Electronics Lighting Group's line card may be unfamiliar to distributors, reps and manufacturers in the lighting market, the company stocks LED components from Osram Opto Semiconductors and products from Bussmann, Molex and Tyco.
Color Kinetics recently made headlines with its acquisition by Netherlands-based Royal Philips NV, parent company of Philips Lighting Co., Somerset, N.J. (see related story on page 22). At the time of the deal, Bill Sims, president and CEO at Color Kinetics, said, “Rather than trying to be all things to all markets, we're very pleased to align with a distribution partner like Arrow, that can get our technology into the hands of manufacturers in diverse industries.
“Now more than ever, manufacturers both within and beyond the core lighting industry are exploring ways to incorporate LED technology into their products or introduce entirely new LED-based product lines. Whether for conventional fixtures, automotive lighting, consumer products or toys, LEDs offer indisputable advantages in terms of their long-life, low-power nature and capability for intelligent digital control.”
Along with distributing LED components, Arrow Electronics also provides design assistance through the Arrow Consulting Engineering Services (ACES) program, which assists Arrow's customers in finding highly skilled design service firms to help them design LED-based lighting solutions.
Says Robert Sagebiel, director of lighting for the Arrow Electronics Lighting Group, “Being successful in the lighting industry is more than just specifying the LED — it's about how the end product is used. Finding the best LED, the right ballast or LED driver components, optics, heat sinks and final assembly options is critical in developing a real-world solution that is both easily manufactured and meets the needs of the customer. By partnering with third-party experts, we can help our customers identify these elements and develop the best available LED lighting solution.”
Arrow's Sagebiel is quite familiar with the electrical wholesaling industry, having joined Arrow from Chicago Miniature Lamp Inc., Hackensack, N.J., where he held positions in both sales and marketing. He has more than two decades of experience in the lighting industry, and spent the last several years building new business and managing product development. At Arrow, he will manage regional lighting specialists, lighting applications engineers and inside sales representatives.
Says Sagebiel, “High brightness (HB)-LEDs are expanding from the industrial market into residential, retail and outdoor applications and are replacing incandescent and fluorescent lamps.”
The company has high hopes for its LED business, which will not only provide lighting manufacturers with alternatives to incandescent, halogen and fluorescent lighting for general-lighting applications, but will also be a source of LED products for OEM manufacturers that produce lighting products and systems for other applications such as signs, flashlights and cars. According to its 2006 annual report, the company expects its lighting business to double in sales by 2010.
Arrow Electronics isn't the only distributor from the electronics arena interested in LEDs. With its Future Lighting Solutions business unit, Future Electronics, Pointe-Claire, Quebec, the third largest electronics distributor with $4.5 billion in international sales, has a distribution agreement in place with Lumileds, a major producer of LED components that's owned by Philips Lighting.
Meet Arrow Electronics
The Melville, N.Y.-based company is the second-largest electronics distributor in North America (after Avnet, Phoenix), according to Electronic Business magazine. The company had 2006 sales of $13.6 billion and 12,000 employees working in 260 locations located in 55 countries and territories. Arrow has 140,000 customers and 600 suppliers.
Arrow's product offering includes semiconductors and other electronic products, interconnect products and computer products. According to www.hoovers.com, Arrow also provides value-added services such as component design, inventory management and contract manufacturing. The company early this year bought the computer distribution business of Agilysys for $485 million in cash.