Is LiFi taking over WiFi?

7

October

2021

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In the last decennia, multiple industries have been disrupted to the point that the incumbents needed to change their business model. Industry leaders lost their competitive edge in their current industry and tried to explore new opportunities in nascent ecosystems. With the rise of digital technology, businesses try to explore growth by creating new digital platforms to either connect users and complementors in order to create a unique value proposition (Gawer and Cusumano, 2008). The question still remains if large corporations can still do the same and if it is possible to become profitable again.

A world-renowned company famous for developing and selling luminaires, Philips Royal, currently know as Signify, is trying to explore new opportunities by creating a digital communication platform called Lighting Fidelity (Signify, 2019).  Li-Fi is a derivative of optical wireless communications (OWC) technology, which uses light from light-emitting diodes (LEDs) as a medium to deliver network, mobile, high-speed communication in a similar manner to Wi-Fi (LEDsMagazine).

LiFi - What It Is, How It Works, What It Provides, How to Apply, and Its  Future Prospects — LED professional - LED Lighting Technology, Application  Magazine

Advantages in contrast to Wifi (Signify, 2020):

  • Security: The data travels via light, meaning data cannot leave the room, therefore more secure
  • Reach: It can be used in places where WiFi is not able to, such as transport
  • Speed: It is 100 times faster

 After losing huge market capitalization, year after year, Signify started investing in a new platform that could possibly compete with WiFi. This platform is trying to position itself in a highly dominated WiFi- industry, something that is extremely difficult since this confronted the firm with new challenges and strategic decisions.

However, according to some scholars, it is important to initially place the new platform in a complementary way, in order to gain the trust of the industry players (Khanagha, 2020). Which is something Signify did by explicitly mentioning the platform focusses on unmet user needs. Not only did the firm gained trust by doing the latter, Signify applied their current capabilities regarding connectivity to invest in the new platform. Finally, Khanagha et al., (2020) mention the final step of platform positioning is in a competitive way in order to take over the entire industry. Looking at recent milestones of the platform, it can be argued that they are slightly starting to take over the industry since the first Boeing 777 is equipped with the technology, therefore directly competing with the dominant platform (Signify, 2019). Nonetheless, the platform is still in its infancy, therefore still not taking over. However, the platform made big leaps which can be analyzed if you click on the following link: https://www.signify.com/global

This shows that Firms who lose their competitive edge can reuse their current capabilities and invest in new capabilities are able to develop a new digital platform.

Sources

Gawer A, Cusumano MA. (2008). How companies become platform leaders. MIT Sloan

Management Review 49(2): 28-35.

Khanagha, S., Ansari, S., Paroutis, S., & Oviedo, L. (2020) Mutualism and the dynamics of

new platform creation: A study of cisco and fog computing. Strategic Management Journal.

Signify. (2018). Annual report 2018. https://www.signify.com/static/2018/signify-annual

report-2018.pdf

Signify. 2019. Annual report 2019. https://www.signify.com/static/2019/signify-annual

report-2019.pdf

Signify. (2020).

Annual report 2020. https://www.signify.com/global/our

company/news/press-releases/2021/20210223-signify-publishes-2020-annual-report

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