Despite increasing competition, Europe-based lighting firm Philips reported an on-year revenue growth of 10.5% for its lighting business unit in 2012. In 2013, the business unit's revenues are predicted reach EUR8.78 billion (US$11 billion), representing an on-year growth of 40%.

In 2013, the LED lighting business is predicted to account for 33.7% of total lighting business at Philips, according to Digitimes Research. This means the growth of traditional lighting is expected to be limited and lighting firms will continue to focus on the development of LED lighting.

Philips has been focusing on professional lighting which accounts for 75% of total lighting sales because the retail market has been plagued by severe price competition. Philips Lumileds focuses on producing high-power LED components which gives the firm a strong competitive advantage in LED outdoor lighting. Compared to other Europe-based lighting firms, Osram has strong competitive advantages in automobile LED components while Zumtobel develops smart lighting control systems.

Philips believes there is growth potential for digital smart lighting products and has been developing the niche market. In 2015, investment in R&D smart lighting products is predicted to account for 94.6% of total R&D capex. Philips predicts in 2020, LED lighting fixtures and systems will account for 57.4% of the global lighting market.