III‐nitride laser diodes (LDs) are an interesting light source for solid‐state lighting (SSL). Modelling of LDs is performed to reveal the potential advantages over traditionally used light‐emitting diodes (LEDs). The first, and most notable, advantage is LDs have higher efficiency at higher currents when compared to LEDs. This is because Auger recombination that causes efficiency droop can no longer grow after laser threshold. Second, the same phosphor‐converted methods used with LEDs can also be used with LDs to produce white light with similar color rendering and color temperature. Third, producing white light from color mixed emitters is equally challenging for both LEDs and LDs, with neither source having a direct advantage. Fourth, the LD emission is directional and can be more readily captured and focused, leading to the possibility of novel and more compact luminaires. Finally, the smaller area and higher current density operation of LDs provides them with a potential cost advantage over LEDs. These advantages make LDs a compelling source for future SSL.