Open letter to Lumileds

Lumileds is the manufacturer of the the Luxeon Star line of LEDs. They also manufacture many other types of LED products. Infact, they own 85% of the high mounted brake light business (high flux red LEDs).

Currently, Lumileds leads the market in high flux, high power LEDs. We use their 1W white LEDs in our flashlights.

LEDs, like all semiconductors have variations from part to part. No two LEDs are indentical. Difference are measured by flux, tint and forward voltage.

Flux indicates the lumenosity of the part at rated current. This is a result of efficiency. Higher flux parts are more desirable, especially in batter powered devices. Higher flux translates into more brightess and/or longer run times for our flashlights.

Lumileds sorts their parts by reel and labels each reel for the bin (an average) quality of the LEDs on that reel. This is a three character code. For example, P4J indicates a,

Flux of 23.5 to 30.6 lumens/watt,
a Tint (CCT) of 6000 to 7000 nm,
and a Forward voltage of 3.27 to 3.51 volts

When recieving a reel from Lumileds, the bin of the reel is unknown until you actually get it in the mail. But some of these reels are simply usuable for certain industries, like ours for example.

So far, the policy of Lumileds has been for the customer to, "take what we send you". Furthermore, returning un-opened product has been promised but has yet to actually be permitted.

I would strongly encourage Lumileds to,

A. Make the parts much easier to return for full credit.

and/or

B. Allow customers to specify which bin they can purchase.

Someone may argue, "but we have no control on what comes off the line and of course everyone will want the best product and then we will be stuck with all this less desirable product".

Please consider this: Charge standard price for the middle bin, a premium for the higher bins and a discount for the lower bins. You will find that your customers are happier, more plentiful, able to stay in business and buy more. You will also find that you are actually making higher margins on your product overall, which more than offsets the extra sales/inventory overhead in channeling the different bins. Of course, I do not work at Lumileds, so maybe I presume this to be too easy from my perspective. But if this can be done, I would very much encourage you to allow us to buy the premium bins at a premium price.

Arc Flashlight LLC would be willing to pay a 100% premium in price for a high quality bin.

Sincerely,

Peter Gransee
President
Arc Flaslight
Lover of Luxeons
First to sell Luxeons in a flashlight

Peter,
The letter is well put.
To make more money in a market, you have to segment it out, like express mail, 2nd day, 3rd day, first class, etc... Marketing 101...
I could see myself paying more for my mods if we had a choice.
Ting

here here! (or is it hear hear?) As I mentioned in another thread, I would be using dozens of the things if I could guarantee that if I bought a dozen I could use all of them!

-James

Some folks bet their lives on quality product(s). We will be doing business with ARC (Peter Gransee) because we trust him/his products. We are willing to pay premium price for premium product. Please help him meet our needs.
-carl

Well said, Peter!

This request is consistent with how some semiconductor manufacturers charge for certain IC's. In my industry where we use a lot of Field Programmable Gate Arrays, parts are binned by "speed grades". The parts that can be clocked at higher clock speeds command a premium (50% is not unusual) and lower speed grade parts are sold at a lower price. CPU makers follow a similar convention. Lumiled's *SHOULD* be following this convention simply for the reason that Peter has stated. It is a win-win situation for manufacturer and customers alike. Lumiled's can dispose of LED's at a lower bin rating at a discounted price and offset that by charging a premium for premium grade parts. The can manipulate the demand supply curve based on their fab yields.

I agree with Mr. Gransee's proposal. I would pay a premium for his products knowing that he is getting the best of yours.

Aloha

Brian

Sounds like Lumileds is acting alot like Microsoft: not listening to their customers. This means they don't care. This problem originates in the boardroom, where corporate policy is set. It also looks suspiciously like they are dumping product that is NOT suitable for the meat of their business. Hence the 'you take what we feel like sending you' policy.

i totally agree peter. this would be excellent for all involved.

jennifer said something about this when i asked her about binning, she said the first quarter (i think, maybe 2nd?) lumileds would sell either high-end or lower-end luxeons...please anyone correct me if i don't remember correctly. has anyone else heard of this?

Well put Peter. I am sure they could increase profitability on the high quality leds, sell more mid range quality leds, and reduce the number of low grade leds produced when they see that there is really not much of a market for them. I just hope that they can institute quality control enough to evolve in their business.

Peter,

The message in your open letter is proper. However, I was wondering if it would be much better for you to contact Lumileds directly using your capacity as president of Arc FlashLights. I doubt an open letter in this forum will attract Lumileds attention.

In a similar vein, since your company is also sorting out the LEDs received from Lumileds, perhaps you can also market the Arc LS in two categories: normal Arc LS and a premium Arc LS.
A normal LS2 could be sold at say $130 and a premium at say $190, with the intention that the premium LS2 being those which have a very good P ranked LED (or Q). I think this will be a good solution until the time when Lumileds can more accurately rank their LEDs.

Thanks, as always.

- Lean

Yes, the letter was forwarded up the flagpole.

Hmm. Different ranks? Kind of like the LE?

SLS2: $90 (blemished housing, Hand sorted M to O flux, 3 or 4 tint HD LED)
LS2 standard: $120 (good housing, Hand sorted M to O flux, 3 or 4 tint HD LED)
LS2 LE (LS2+): $160 (good housing, Hand sorted P or Q flux, 3 or 4 tint HD LED)

Just a thought of course, not sure I can get a consistent supply of the LS2+.

Peter

Yikes! LS2+! I'll buy one!

Peter,

That grading looks like a great idea.

Regards,

Ed

Peter,

I think a lot of CPFers (and hopefully others) will be very happy with different ranks of LS2, at least till Lumileds get their act together. I for one wouldn't mind paying more for a Q3 ranked LS2. Having different ranks allows a person to buy whichever LS2 he/she is willing to pay. Even if the supply of good P and Q LEDs are limited, those who are willing to wait and pay the extra premium can do so. At least the customers know what they're getting when they order a particular 'type' of LS2. I think it would solve lots of problems for both the customers and ArcFlashlight.

off topic but LLLean why so bleek on hunting?
last time i checked people hunted for food ie meat and clothing ie fur.
i might be the only one but i hunt for food.
the truth is without some hunting we would be overpopulated with deer.

i just think your sig line is a little harsh and offensive to us hunters out there.
but do not read me wrong i do not wish you to take it off or change it i just want your opinion.

mike

Unfortunately Lumileds has no competition in the area so they are at Liberty to take that snobbish attitude.

Peter, please do tell us the result of your correspondence and if there is anything we can do.

It seems we will just have to accept that there are certain limitations to this new technology. Both of our suppliers, Lumileds and Nichia, manufacture a unique product that cannot be purchased elsewhere.

We love their product and must have it. Maybe the best solution is to step back a bit and just realize that we are a bit early for perfection. Our product needs to continue and therefore, we need to be realistic about what it can do.

Peter Gransee

Peter, fab houses have been grading and sorting/binning parts since the dawn of time. What's surprising is not that they are having trouble producing high-grade parts but they are not using the opportunity to raise prices on these rare parts.

My fear is this may actually hint that they are changing fab processes or are make real progress at increasing overall yield, but that the tightened process isn't going to yield as many "statistical outliers" - either dead parts or really good parts. They're just going to be able to produce lots more mediocre parts.

Peter,

Granted that Lumileds will probably continue to supply LS with varying quality, do you think your company will consider selling different quality Arc LS2 as discussed a few postings earlier.

I think it would solve a number of problems for both the customers and ArcFlashlight. The customers will at least have a better experience when they receive their particular type of ArcLS2 because the quality will better match what they expected and paid for. As it is right now, if a customer receives an LS2 not to their expectation (eg. in the recent reports by those receiving the SLS2), they will be quite unhappy about the flashlight and the Arc Flashlight company in particular. Secondly, a customer may actually think the ArcLS2 is an inferior product, not knowing that the particular one they had received actually has a low quality LED.

So having at least a 2-tier standard for the ArcLS2 (something like what you came up with) sounds like a good solution for both sides. Please let us know if you're considering this implementation. I sincerely hope so.

I thank you in advance.

- LL