Smart Lighting Market Size, Share & Trends Analysis Report By Component, By Connectivity (Wired, Wireless), By Application (Indoor, Outdoor), By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global smart lighting market size was valued at USD 10.85 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 20.4% from 2021 to 2028. The ability of lights to connect with IoT devices and create a variety of ambient lighting using just smartphones or tablets has increased its popularity and demand across commercial and residential spaces. Smart lights are dimmable with various color tones as per requirement, can be scheduled to turn on/off, monitor lighting’s energy usage, and be connected via Wi-Fi, Bluetooth, SmartThings, Z-Wave, or ZigBee. Additionally, smart lights can be voice-controlled by integration with the platform, such as Google Assistant, Amazon’s Alexa, Apple’s Siri, or Microsoft’s Cortana. These wide ranges of features apart from illumination coupled with growing adoption for IoT devices and smart assistant platforms have created market growth avenues for smart lightings.

Smart lightings are also termed connected lighting as it can be seamlessly integrated into the IT network in a building or city infrastructure to share information regarding the status of the operation. For instance, smart street lights in city parking or roads ensure safety by offering wide coverage, environmental monitoring, parking and traffic management information, and city surveillance by connecting with IoT devices. Smart lights are often integrated with sensors, which turn them into a point of intelligence device to gather information on activity patterns, daylight levels, occupancy, change in temperature, or humidity. This information proves to be vital for government departments to take appropriate actions and monitor the city for unwarranted activity.

Government policies encouraging energy conservation and environment protection coupled with stringent regulations discourage the usage of incandescent lamps, which is anticipated to bolster the demand for LED smart lighting. The global lighting industry consumes approximately 19% of the total electricity and is responsible for around 6% of the total greenhouse gas emissions. On the contrary, LED smart lights are highly efficient. They consume almost 70% lesser energy and connect devices to collect information for future processes. They have significantly longer life spans and are free from any mercury content. Similarly, there are no harmful greenhouse gas emissions associated with LED lights. Thus, the LED technology has potentially revolutionized the entire lighting industry and infiltrated the smart lighting segment wherein LED is a preferable choice among vendors and consumers.

The penetration of smart lights is expected to increase owing to benefits such as controlled power usage, longer life, multiple light setting in a single lamp/luminaire, and availability of a wide range of modern decorative lighting products. The adoption of smart lighting in the residential, commercial, and industrial sectors is yet to reach its full potential. Hence, various government initiatives to promote the use of LED-based smart lights are expected to boost their demand over the forecast period. For instance, in January 2019, N.Y. Power Authority allocated a fund of USD 7.5 million to municipalities across the state for installing new smart LED street lights. Moreover, countries such as China, Brazil, Colombia, Mexico, France, Spain, and Germany have imposed a complete ban on the sale of incandescent lamps to encourage the adoption of LED lights; wherein high-income groups are leaning towards LED-based smart lights. Furthermore, many smart lighting companies have reported a negative impact of the COVID-19 pandemic due to lockdown, disrupting construction activity, and raw material supply. The decline in consumer purchasing capacity, and delay in completing construction projects due to the COVID-19 pandemic pushed the smart lights purchase order quantity, timeline, and payment.

Smart lighting Market Trends

Smart lights consist of several networked components, including lighting fixtures that collect information about the physical environment and allow users to control or adjust devices based on their requirements. The advent of the Internet of Things (IoT) and its rising set of applications in lighting systems has contributed to the growth of the smart lighting market. Moreover, advancements in technologies that allow the easy integration of functions such as ambient sensing and voice control in lighting systems have widened and diversified the scope of smart lighting applications.

Smart lighting systems use wired and wireless communication protocols such as Bluetooth, Wi-Fi, ZigBee, DALI, EnOcean, and Sigfox for the networking of necessary components. Lighting control modules receive real-time information such as lighting environment and transmit signals to the lighting system or luminaires to undertake actions such as switch on or switch off lights and adjust brightness.  For instance, the Hue Lighting by Philips is a smart home lighting system, which provides an entire range of lights that can be controlled using the Hue app on smartphones. The emergence of such integrated lighting systems has boosted the demand for smart lamps and smart fixtures.

LED prices have been plummeting over the past years owing to various factors, including overproduction of LED chips and packages and a comparatively slower rise in the demand for LED lamps from the backlight segment. The trend has led to the introduction of low-priced LED chips and packages in the general household lamp segment. Several governments have been promoting the use of LED lights owing to benefits such as energy efficiency, cost-effectiveness, and a longer lifespan when compared to other lightings. For instance, in November 2019, the California Energy Commission voted to ban the sales of inefficient lighting bulbs with effect from 01 January 2020. China has also banned the production of incandescent lights for domestic use to encourage the replacement of traditional lighting with LED lights.

Moreover, concerns regarding the rising consumption of non-renewable power, which is a major contributor to greenhouse emissions and environmental deterioration, are rising among consumers and enterprises. Lighting is an indispensable requirement in daily activities and accounts for around 15% of the global electricity consumption and around 5% of the global greenhouse gas emissions. Conserving the energy utilized on lighting can significantly limit carbon emissions and improve environmental health. Increasing pressure to make changes on this front has encouraged several policymakers and governments to implement sustainable policies to promote energy-saving lighting products. Additionally, several governments are promoting and providing education on sustainable energy-saving practices to end consumers. Increased awareness related to the quality of health and energy conservation practices could drive the demand for energy-saving products in the near future.

However, the total cost of ownership of smart lighting includes the direct and indirect expenses incurred during the complete life cycle of owning or using a smart lighting product. It includes the cost of equipment, cost of installation, deployment, operation, upgrading, production, and maintenance. Moreover, smart lights consist of various components such as sensors, control systems, dimmers, switches, and software. As a result, the initial costs of smart lights are higher than conventional lights, which may compel several residential owners and low-budget end-users to select alternate or conventional energy-saving lightings. This could limit the adoption of smart lights to a certain extent. Also, smart lights are sometimes incompatible with conventional infrastructures and fittings due to the difference in their form factor and circuitry, which means the switches may have to be replaced at times. Similarly, all the smart lighting fixtures associated with conventional or existing fittings cannot be used with all lighting sources as an enclosed fixture does not allow the heat to dissipate from the bulb. LED bulbs dissipate lesser heat as compared to incandescent bulbs because of the heat sink installed at the base of the LED bulb. However, if the LED bulb is enclosed in a closed housing, it would not be able to dissipate the generated heat effectively and the overall lifespan of an LED lamp may reduce. Such compatibility concerns could restrain the growth of the smart lighting market.

Component Insights

The smart lighting market is segmented into three components, namely hardware, software, and services. The hardware segment led the market with a revenue share of more than 57% in 2020. Smart lighting hardware has been further categorized into lamps and luminaires, wherein the smart lamp segment is exhibiting high growth potential during the period 2021 to 2028. The hardware segment demand is attributed to the popularity of connected lighting bulbs and fixtures that can change hues, dim lights, and switch on/off using a controlling device such as a smartphone or tablet.

The software segment is anticipated to register the highest CAGR over the forecast period. The demand for Smart Lighting is driven by the increasing adoption of smart lighting for data-driven causes in critical areas. Also, the software application is required by each brand to facilitate the controlling of lights using smartphones or tablets. The apps also help in connecting smart lights with smart platforms such as Alexa, Crotona, and Siri to control using voice commands. The immense popularity of crating ambient atmosphere and aiding in data collection in smart cities is expected to boost the segment growth over the forecast period.

Connectivity Insights

The wireless connectivity segment is expected to register the fastest CAGR of over 20% over the forecast period. Wireless connectivity in a smart lighting environment is highly preferred among consumers that need connections within a small range, making it the highest growing segment over the forecast period. Wireless technology such as Wi-Fi, Bluetooth, SmartThings, Z-Wave, or ZigBee connects lighting fixtures with smartphone apps to control the light bulb's functions. The residential sector has majorly adopted wireless technology to control the luminaire hues and color for aesthetic purposes within a confined space.

The wired connectivity segment emerged as the highest revenue contributor in 2020 and is expected to retain its dominance over the forecast period. The wired connections are required for the range above 30 feet. Ethernet as an exception can facilitate wired connection within 100 meters, while DALI, DSI, and DLVP provide connectivity above the range of 1000 feet. The increasing adoption of smart lighting in commercial and industrial spaces is driving the demand for wired connectivity in the smart lighting space.

Application Insights

The indoor lighting application segment dominated the market and emerged as the highest revenue contributor compared to outdoor lighting applications. The indoor application is further sub-segmented into residential, commercial and industrial. The residential segment is expected to attain a high growth rate over the forecast period due to the rising popularity of smart lighting bulbs and fixtures that can be controlled by the user for setting different lighting moods. Additionally, demand within commercial and industrial space is propelled by the need to control lighting consumption as the office spaces or warehouses are functional 24x7 and need regular power supply throughout the day and night. Installing smart lighting with inbuilt sensors ensures lights are used only in the required area based on the movement of people, which is captured by the sensors. Also, the light setting can automatically dim based on outside lighting inside the premises.

The outdoor segment is expected to register the highest CAGR over the forecast period. The outdoor segment is further sub-segmented into highways & roadways, architecture, and others. The outdoor architectural application comprises lighting for patio, gardens, exterior walls, and outdoor premises of the residential or commercial space. The burgeoning demand for smart lighting in outdoor applications is fueled by the need to provide energy-efficient lights and monitor outdoor activity. This phenomenon is specifically adopted for smart street lighting. The government has invested in installing LED-based smart lighting connected with the camera and sensors to capture and share data on outdoor activity.

Regional Insights

Europe is leading the way in drafting safety and uniform performance standards for certain indoor commercial smart lighting for garages, roadways, and parking. Dedicated LED luminaires and LED replacement smart lamps are emerging as the key growth areas in the lighting industry in line with the continued advancements in LED designs and technology. While incumbent smart lighting manufacturers continuously update their product offerings, existing manufacturers are expanding their product portfolio to foray into the market. A looming surplus of dedicated smart luminaires vendors can be particularly noted for applications, such as downlighting, task lighting, landscape lighting, general ambient illumination, and outdoor general area lighting.

North America is estimated to be the second largest region with a significant CAGR due to consumers' growing acceptance of smart lighting and the energy-efficient solution to the lighting problem in the region.  Also, several leading companies, such as Honeywell International Inc., have introduced smart lighting solutions with the latest technologies, encouraging the adoption of the smart lighting solutions in the region.

Asia Pacific is expected to emerge as a prominent region owing to the surging demand from the commercial and residential application segments. China is projected to emerge as the largest revenue contributor controlling the highest global market share. Countries, including Japan, India, and South Korea, are anticipated to be at the forefront of smart lighting adoption due to their rising economies and increasing investments in smart city projects. The smart lighting demand in the Asia Pacific is largely influenced by the changing scenario of lighting across commercial sectors. The increasing commercial building construction for office, retail, and entertainment is creating an opportunity for fresh demand for smart lighting. However, the onset of the COVID-19 pandemic affecting construction activities during the initial days, is expected to inhibit the expected growth in demand for smart lighting.

Key Companies & Market Share Insights

The companies are competing to capture a maximum distribution network to lead the market. The traditional manufacturers and new players in the market are aware of the importance of distribution networks. Companies are investing high in enhancing their distribution networks. For instance, Kokilanje Philips N. V. has well utilized its already well-established distribution network to distribute its LED products worldwide. The company is also trying to capture more distributors and retailers for increasing its smart lighting sales.

The practice of forwarding and backward integration is increasing among manufacturers. For instance, Changfang and Honglitronics are expanding from smart light packaging to downstream applications to control costs and invest more in distribution networks. A strong distribution network enables the rapid replacement of traditional lights with LED smart lights. The market leaders are focusing on manufacturing affordable smart lighting products to reduce the price of LED smart lighting products, which would lead to mass adoption. Technological innovation has helped reduce product prices rapidly and increased the penetration of smart lighting in global markets. The price drop and strong distribution network will help smart lighting products garner high demand in the market. Some of the prominent players operating in the global smart lighting market are:

• Acuity Brands

• Signify Holding

• Honeywell International Inc.

• Itron Inc (Streetlight Vision)

• Ideal Industries, Inc.

• Häfele GmbH & Co KG

• Wipro Consumer Lighting

• YEELIGHT

• Sengled Optoelectronics Co., Ltd.

• Verizon

• Schneider Electric SA

Smart lighting Market Report Scope

Global Smart lighting Market Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2028. For this study, Grand View Research has segmented the global smart lighting market based on component, connectivity, application, and region:

• Component Outlook (Revenue, USD Million, 2017 - 2028)

  • Hardware

    • Lamp

    • Luminaire

  • Software

  • Services

• Connectivity Outlook (Revenue, USD Million, 2017 - 2028)

  • Wired

  • Wireless

• Application Outlook (Revenue, USD Million, 2017 - 2028)

  • Indoor

    • Residential

    • Commercial and Industrial

  • Outdoor

    • Highways and Roadways

    • Architectural

    • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • MEA