The global lighting market will increase at a 7-9% compound annual growth rate from 2010-2015 to EUR80 billion (US$109.63 billion) with emerging markets in Asia and LED lighting as the main drivers. The LED light source market (including light bulbs and light strips) will expand to EUR12 billion in 2015 and the LED lighting device market EUR30 billion, said Nigel D'Acre, regional business director for Philips Lighting.

LED lighting will represent about half of the global lighting market in 2015 and up to 75% in 2020, according to Philips' projections.

Philips aims to maintain its leading position in the global lighting market in 2015, and the company believes the key is LED light source solutions and management of the traditional lighting sales network. Philips' target is for its lighting operation to achieve 12-14% in profit margin before tax, interest and amortization.

The company allocates roughly 5% of annual revenues for research and development, and LED digitization will account for 75% of total development budget, up from 65% in 2010 and 57% in 2009.

The Asia LED market has strong potential with the region's gross domestic product (GDP) growing at an average of 8-10% annually, large population, rapid urbanization and infrastructure improvements, said D'Acre. The emerging markets currently account for 33% of the Philips business group's revenues and about 38% of its lighting operations, according to the company's latest results.

With the growth in LED lighting, revenues from the lighting businesses in the fourth quarter of 2010 increased 37% on year and 9% for the year.