Global Smart Lighting Market; By Component (Hardware, Software, and Services); By Connectivity (Wireless and Wired); By Application (Indoor and Outdoor); As well as by Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast: 2023-2032

Report Overview

The global smart lighting market achieved a value of USD 12.9 billion in 2021 and is expected to expand at a compound annual growth rate of 19.4%, between 2023-2032. It is expected to reach USD 90.71 billion by 2032.

This industry’s ability to link with IoT devices to create ambient lighting from just smartphones or tablets has made smart lighting solutions more popular and in greater demand. Smart lights can be controlled by voice and can be configured to turn on/off or monitor energy usage.

These solutions can be synced with various virtual assistant software including, Google Assistant, and Amazon Alexa. and Apple’s Siri. This broad range of features in addition to illumination has created new growth opportunities for smart lighting market players.

Global Smart Lighting Market Scope:

Component Analysis

On the basis of ‘Component’, the market for smart lighting is divided into three parts: software, hardware, and services. This market’s largest segment, the ‘Hardware’ segment accounted for more than 56.1% in revenue shares in 2021. There are two types of smart lighting hardware: lamps and luminaires.

The ‘Smart Lamp’ segment is expected to register high growth potential between 2023-2032. The popularity of connected lighting fixtures, which can dim and change hues, as well as be turned on/off with a tablet or smartphone, is driving hardware demand.

The ‘Software’ segment is expected to register the highest CAGR over the forecast period. This segment is driven primarily by the growing adoption of smart lighting to support data-driven causes in critical areas. Every brand needs a specific software application in order to control lights from smartphones and tablets.

The apps can be used to connect smart lights with virtual assistant platforms, such as Cortana, Alexa, and Siri, and allow for system control via voice commands. The segment growth is expected to be boosted by the growing popularity of apps that create an atmosphere and assist in data collection in smart city environments.

Connectivity Analysis

The fastest expected CAGR of over 21.2% is expected to be indexed by the ‘Wireless Connectivity’ segment over the forecast period. Services of this segment are preferred by consumers who require connections within a shorter range. Wi-Fi technology, such as Bluetooth, SmartThings, or Z-Wave connects lighting fixtures to smartphone apps that control their functions. Wireless technology has been adopted by a majority of residential applications to control luminaire color and hues within a limited space.

In 2021, the ‘Wired’ connectivity segment was the top revenue contributor in this market and is expected to continue its dominance over the forecast period. Wired connections are required for connections above 30 feet in length. Ethernet is an exception that allows wired connectivity within 100 meters. DALI and DSI provide connectivity beyond 1000 feet. The growing use of smart lighting within commercial and industrial settings is driving the demand for wired connectivity.

Application Analysis

On the basis of ‘Application’, this market was dominated by the ‘Indoor Lighting’ segment, accounting for the largest share of total market revenues. The indoor application segment can be further sub-segmented as residential, commercial, or industrial. As smart lighting bulbs and fixtures can be controlled by the user, there is expected to be a strong level of adoption in the residential market.

Commercial and industrial demand is driven by the need for control over lighting consumption. Office spaces and warehouses operate 24×7 and require a regular power supply. Inbuilt sensors in smart lighting solutions ensure that lights are only used where they are needed, based on movement. Users can adjust the light settings to match the outside lighting.

The ‘Outdoor’ segment is expected to index the highest CAGR over the forecast period. The outdoor segment can be further sub-segmented into highways and roadways, architecture, and others. Outdoor architectural lighting includes lighting for the patio, garden, exterior walls, and the outside premises of a residential or commercial property.

There is an increasing demand for smart lighting for outdoor applications. It is important to monitor outdoor activity and provide energy-efficient lighting. This technology is used for smart street lighting purposes. Various governments have now invested in LED-based smart lighting solutions that are connected to a camera and sensors in order to capture and share information concerning outdoor activity.

Key Market Segments:

Component

• Hardware
  • Luminaire
  • Lamp
• Software
• Services

Connectivity

• Wireless
• Wired

Application

• Indoor
  • Commercial and Industrial
  • Residential
• Outdoor
  • Architectural
  • Highways and Roadways
• Others

Market Dynamics

Because smart lighting can be integrated seamlessly into a network of a building, or city infrastructure, it is often called connected lighting. This allows for information to be shared about the status of the operation. Smart streetlights in cities can be used to improve safety.

Many smart lights integrate sensors which make them point-of-intelligence device that gathers information on activity patterns and daylight levels as well occupancy, temperature change, and humidity, among other factors. This data is vital for government departments to make the right decisions and monitor urban areas for any unwarranted activity.

Incandescent lamps will be discouraged by government policies encouraging energy conservation, environment protection, and stringent regulations. This is expected to increase the demand for LED smart lights. The global lighting industry accounts for about 19% of all electricity consumed and for around 6% of greenhouse gas emissions.

LED smart lighting is far more efficient than conventional lights. They are 70% more efficient than traditional lighting and can be connected to other devices to provide information for future processing. They have a significantly longer lifespan and no mercury content. Additionally, LED lights emit no harmful greenhouse gas emissions. LED technology is now a preferred choice for both consumers and vendors in the smart lighting sector.

Smart lighting is expected to grow in popularity due to its many advantages, such as reduced power usage, longer lifespan, multiple light settings in a single lamp/luminaire, as well as the wide availability of modern decorative lighting options. Smart lighting has yet to be fully adopted in residential, commercial, and industrial settings. There are several government initiatives that promote LED-based smart lighting solutions. This will also likely increase its demand over the forecast time.

N.Y. Power Authority, for instance, allocated US$ 7.5 million in January 2019 to cities across the state for new smart LED street lighting. In order to encourage the adoption and use of LED lights. Countries such as Brazil, Mexico, Colombia, Spain, France, and Germany have all banned the sale of incandescent lamps. Smart lighting companies have also reported negative impacts on account of the COVID-19 pandemic. This is due to lockdowns, disruptions in construction activity, and the lack of raw material supply.

The COVID-19 pandemic caused a decline in consumer purchases and the delayed completion of construction projects. This led to lower smart light purchase order quantities, postponed timelines, as well as a delay in payments.

Smart lights include several components. They can include lighting fixtures and sensors which collect information about the surrounding environment. This allows users to adjust and control devices based on their needs. Smart lighting is growing due to the surge in prominence of the Internet of Things (IoT), which has a growing set of applications in lighting.

In addition, advances in technology that allow for easy integration functions such as ambient sensing or voice control in lighting systems, have broadened and diversified the range of smart lighting applications.

Smart lighting systems can use wireless and wired communication protocols, such as Bluetooth, ZigBee, WiFi, and EnOcean for the networking of required components. Lighting control modules are able to receive real-time information, such as the lighting environment, and transmit it to the lighting system or luminaires.

They can perform actions such as turning on or off lights or adjusting brightness. Philips’ Hue Lighting is an example of a smart lighting system that allows users to control an array of lights from their smartphone using the Hue app. This integration of lighting systems has increased the demand for smart lamps as well as smart fixtures.

LED prices have dropped over the last few years because of a number of factors. These include the overproduction of LED chips, and packages and a slower increase in the demand for LED lamps. Low-priced packages and LED chips have been introduced to the general household lamp market. Numerous governments have promoted the use of LED lights due to their energy efficiency, cost-effectiveness, and longer lifespan compared to other lighting options.

The California Energy Commission, for instance, voted in November 2019 to ban the sale of inefficient light bulbs starting January 01, 2020. China has also banned incandescent lamps for domestic use, to encourage the transition to LED lighting.

Consumers and businesses are becoming more concerned about increasing non-renewable electricity consumption, which can contribute to climate change and environmental deterioration. Lighting is an essential part of daily life. It accounts for approximately 15% of the world’s electricity consumption and 5% of global greenhouse gas emissions. Efficient lighting can reduce carbon emissions and improve environmental health by conserving energy.

Many governments and policymakers are now under increasing pressure to change their policies in this area. They have adopted sustainable policies to encourage energy-saving lighting products. A number of governments have also begun to educate end consumers about energy-saving strategies. The demand for energy-saving products could increase as people become more aware of the benefits of healthy living and energy conservation.

The total cost to own smart lighting products includes both direct and indirect expenses. This includes the cost of equipment, installation, deployment, and operation as well as maintenance. Smart lights are made up of several components including sensors, control systems, and dimmers, as well as switches, software, and other components. Because smart lights cost more than conventional lighting solutions, many homeowners and those with limited budgets may have to opt for energy-saving lighting alternatives.

This could hinder the adoption of smart lights. Owing to differences in form and circuitry, smart lights may not work with existing infrastructures or fittings. In these cases, switches may need replacing. Smart lighting fixtures can only be used in conjunction with existing fixtures or traditional lighting fixtures. This is because enclosed fixtures do not allow heat to evaporate from the bulbs.

The heat sink located at the base of LED bulbs allows for lower heat dissipation than incandescent lamps. If the LED bulb is contained in a closed housing, however, it may not be able to dissipate heat efficiently and thus reduce its lifespan. This compatibility issue could hinder the growth and expansion of the smart lighting market.

Regional Analysis

Europe leads in the development of safety and uniform performance standards. This region accounted for the highest revenue share (37.4%). With continuing advancements in LED design and technology, LED replacement smart lamps and dedicated LED luminaires are new key growth areas in lighting. Existing smart lighting manufacturers constantly update their product offerings.

However, established manufacturers are expanding their product lines to compete in this market. The emergence of dedicated smart luminaires vendors is especially notable for applications like task lighting and lighting in general, as well as outdoor lighting.

North America is expected to account for the second-highest CAGR in the coming years. This can be attributed to North American consumers’ acceptance of smart lighting and energy-efficient solutions. Honeywell International Inc. and other leading companies have developed smart lighting solutions that use the latest technology, which encourages the adoption of these solutions in the region.

The Asia Pacific will emerge as a significant region due to the increasing demand from residential and commercial application segments. With the largest global market share, China is anticipated to be the biggest source of revenue. In nations like South Korea and India, the adoption of smart lighting is anticipated to be a major trend due to their developing economies, smart city initiatives, and increasing investments.

The changing landscape of lighting in commercial sectors has a significant impact on the smart lighting market in the Asia Pacific. Smart lighting is becoming more popular due to the increasing construction of commercial buildings, both for entertainment and retail. However, the COVID-19 pandemic had affected construction activities during its initial days, thus limiting the growth of the smart lighting industry in the process.

Key Regions and Countries Covered іn This Rероrt:

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Russia
  • Spain
  • Rest of Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Rest of Asia-Pacific
• South America
  • Brazil
  • Argentina
  • Rest of South America
• MEA
  • GCC
  • South Africa
  • Israel
  • Rest of MEA

Market Share Analysis

These companies compete to have the largest distribution network and lead this market. Distribution networks are important to both traditional manufacturers as well as new players in this market. Companies are investing significant sums to expand their distribution networks. Kokilanje Philips N. V. for instance, used its established distribution networks to distribute its LED products worldwide. The company also aims to increase its sales of smart lighting solutions by acquiring more retailers and distributors.

Manufacturing companies are increasingly embracing forward and reverse integration. Changfang and Honglitronics, for example, are expanding beyond smart light packaging into downstream applications in order to lower costs and improve their distribution networks. A strong distribution network allows for the rapid replacement and upgrade of traditional lights to LED smart lighting.

Market leaders are working to manufacture affordable smart lighting products in order to lower the prices of LED smart lighting solutions. This would allow for mass adoption. Technological innovations have allowed for rapid price reductions and increased smart lighting penetration in global markets. Smart lighting product players will enjoy greater demand because of their strong distribution networks and low pricing.

Key Market Players

Top players in the global market for smart lighting include:

• Signify holding
• Acuity Brands
• Itron Inc. (Streetlight Vision)
• Honeywell International Inc.
• Hafele GmbH & Co KG
• Ideal Industries Inc.
• YEELIGHT
• Wipro Consumer Lighting
• Verizon
• Other Key Players