In addition to the scale effect, technological progress has also promoted the reduction of the cost of the upper, middle and lower reaches of the LED industry chain. New patents emerge continuously every year and new technologies are continuously released, making the selling price of products lower and lower. In addition, it is a factor of price war. From 2010 till now, the gross profit of most enterprises has shown a downward trend. According to the analysis of research institutions, in the Chinese market, not only emerging LED manufacturers have begun to actively lay out the LED light source market, traditional lighting manufacturers with brand and pipeline advantages also actively adopt a two-pronged approach of network and physical stores to expand LED lighting business. The government is also trying to play an active role in promoting the development of LED industry through subsidy policies, and at the same time to resolve the problems of overcapacity and enterprise bankruptcy caused by excessive subsidies for upstream equipment, it is expected that China's LED lighting products will increase by 86 in 2014. The LED industry is generally expected to be good, and whether it is an outbreak may be carefully analyzed. LED is the general trend, but 2014 is still a process of potential energy accumulation and has not yet reached its peak. The substitution effect is exaggerated. Whether LED can quickly replace traditional lighting and promote the market explosion still needs further observation. From the perspective of energy saving, under the current technical conditions, a 1 watt LED lamp can replace a 7 Watt incandescent lamp or a 2 watt energy-saving lamp. Roughly speaking, the energy consumption of LED lamps is half less than that of energy-saving lamps, and the energy-saving effect is remarkable. However, the energy consumption of lamps is almost insignificant compared with household appliances that frequently consume several kilowatts. Therefore, for many families, the economic benefits of replacement are not obvious. However, the service life of General energy-saving lamps is 5 years or more. Under normal circumstances, unless the original lamps are damaged or the houses are redecorated, the power for consumers to take the initiative to replace them is not enough. LED can only pose a threat to incandescent lamps in the short term, and the hot spot of outside discussion is actually the plan to eliminate incandescent lamps that countries continue to introduce. According to China's road map for the elimination of incandescent lamps, by October 1, 2016, the import and sale of incandescent lamps of 15 watts and above will be banned. It is not realistic to expect indoor lighting products to be replaced in large quantities in the short term. Replacement should be a process of gradual release. In his view, there should be more opportunities for the outdoor lighting market to blow out. Because LED products are widely used in some national construction projects and some municipal projects in cities. Obviously, if the replacement is carried out step by step, then the performance of the enterprise should be in a steady growth state, and it is difficult to show a skyrocketing situation. The replacement process of incandescent lamps by energy-saving lamps may be used as a reference to some extent. Taking Foshan Lighting as an example, it is called China's Lamp King and cash cow, and has always been a benchmark enterprise in the lighting industry. The reporter read the annual report of Foshan Lighting from 2001 to 2012. Data show that in 2001, the company's main business income was 8. 2. 4 billion yuan, net profit is 1. RMB 7. 3 billion. By 2012, the company's operating income was 22. 0. 2 billion yuan, net profit attributable to shareholders of listed companies is 4. RMB 0 billion. In other words, in the past 12 years, the company's revenue has probably increased to 2. 5%. 7 times, the profit will probably increase to 2. 3 times. This speed is not too eye-catching, and this period is precisely the process of replacing incandescent lamps with energy-saving lamps. During this period, Foshan Lighting gradually changed its product focus from ordinary incandescent lamps to energy-saving lamps. It was mentioned in the report of the board of directors in 2002 that T8, T5, energy-saving lamps, automobile lamps, lamps, etc. should expand the production scale, accelerate the development, make the production scale reach a new level and form the advantage of market competition. Another example is sunshine lighting, another listed lighting company, whose main business income in 2001 was 5. 5%. 8. 3 billion yuan, operating income in 2012 was 25. 9. 3 billion yuan, the latter is 4. 4 times. The main product types of sunshine lighting in 2001 s have been integrated electronic energy-saving lamps, T5 high-power energy-saving fluorescent lamps, etc. Although the energy-saving effect of energy-saving lamps has been greatly improved compared with incandescent lamps, even by 2010, the replacement process of the former to the latter has not been completed, and incandescent lamps still occupy of the total.