SMART LIGHTING MARKET ANALYSIS

The global smart lighting market size was valued at USD 20.55 million in 2021 and is anticipated to witness a compound annual growth rate (CAGR) of 25.5% from 2022 to 2030. The growing government investments in the construction and development of smart infrastructure are expected to boost the growth of the global smart lighting market. Also, the growing number of commercial buildings around the world is likely to spur the growth of the market. Advancements in wireless technology are expected to spur the market for smart lighting systems globally. Moreover, the integration of IoT and artificial intelligence into lighting systems can lead to operational efficiencies.

Global Smart Lighting Market: Regional Insights

The global smart lighting market is regionally divided into North America, Latin America, Asia Pacific, Europe, and Middle East & Africa.

North America is expected to dominate the global smart lighting market over the forecast period. This is due to rise in year on year consumption of energy, strong economic status allowing enterprises to invest in the new technologies and solutions such as Li-Fi and IoT in the United States. For instance, according to Coherent Market Insights, in April 2020, the overall consumption of energy in the U.S. was 6.5 quadrillion British thermal units.

Asia Pacific is also projected to witness strong growth in the global smart lighting market over the forecast period. The growth of this region can attributed to growing adoption of advanced technology such as Artificial Intelligence, and Internet of Things, leading to rising demand for the smart home market in emerging countries such as China and India in the region. For instance, recently, the State Council of China detailed strategy of the country to become the top AI superpower by 2030, by developing US$ 150 billion national AI industry.

Figure 1: Global Smart Lighting Market Share (%), By Region, 2021

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 Global Smart Lighting Market Drivers:

The demand for energy saving at homes is growing all over the world, which is a major driver expected to propel growth of the global smart lighting market over the forecast period. As governments across the world started implementing policies and regulations regarding energy consumption, the demand for LEDs has increased all over the world. Moreover, manufacturers are adopting the standards set by governments in shorter period, which is leading to growing propensity of consumers towards the light solutions. In 2007 the Energy Independence and Security Act imposed by Congress in the United States, resulted into new standards for light bulbs. Thus, the rise in demand for energy saving is driving the market growth.

Furthermore, growing adoption of smart lighting due to price drop in the LEDs is also expected to augment growth of the global smart lighting market over the forecast period. An LED fixture offers 60 watts of energy efficiency which normally consumers 10 watts and ads up to US$ 1 as the average yearly bill; whereas an incandescent bulb of 60 watt adds about US$ 7 to the annual bill and has higher rates of replacements. According to the Coherent Market Insights, in 2013, the LED cost used to be US$ 10 and now the cost of the same LED bulb costs US$ 1, which is same as the cost of an incandescent bulb.

Global Smart Lighting Market Opportunities:

Rise in adoption of Internet of Things (IoT) in developing countries is expected to create growth opportunities for the global smart lighting market over the forecast period. In recent times, the IoT has gained significant importance in developing economies. This is due to the benefits of this technology, such as it provides intelligent and innovative technologies and services to people. In these technologies, all the physical objects surrounding them are connected to the internet and are capable of communicating with one another. This in turn is creating several opportunities to the vendors in the market.

Increasing number of governments around the world promoting sustainable energy-saving practices is also creating growth opportunities in the global smart lighting market over the forecast period. Conservation of energy used on lighting helps significantly to reduce carbon emissions as well as to enhance environmental health. The pressure on governments around the world to make changes around these issues is leading to implementation of sustainable policies by governments promoting energy-saving lighting products. Along with this, government organizations are also providing education on environment-friendly energy-saving practices to end users. Thus, these factors are supporting the market growth by creating growth opportunities for players in the market.

Global Smart Lighting Market Trends:

The global smart lighting market is witnessing various trends, among them increasing urban populations around the world is a major trend expected to boost the market growth in the near future. As the urbanization is increasing globally, the concerns regarding reliable, secure and affordable energy supply, environmental effects such as climate change, greenhouse gas emissions and loss of biodiversity are increasing. This in turn is leading to the growing adoption of efficient lighting sources in residential and commercial cities, and this trend is likely to continue in the global smart lighting market over the forecast period.

Furthermore, growing technological developments such as IoT, Cloud computing and Bluetooth is another trend in the global smart lighting market. Due to advent of such technologies, smart homes is now a reality. The number of features implemented in smart homes continues to grow in common households, which boosts the demand for smart LED lighting systems that can be linked to other devices and can be remotely controlled. Thus, smart lighting systems that are powered by LED lightings is trending in the market, which is likely to support the market growth.

Global Smart Lighting Market Restraints:

Factors such as high cost of smart lighting are expected to hamper growth of the global smart lighting market over the forecast period. The overall cost of owing smart lighting comprises the indirect and direct expenses incurring throughout the life cycle of using or owing a smart lighting product. This includes the equipment, installation, operation, deployment, production, maintenance, and upgrading cost. Moreover, the initial cost of smart lighting is higher than traditional lighting, which makes low-budget end-users and residential owners skeptical about the use of smart lighting, and make them opt for conventional energy-saving lighting. Thus, this factor is likely to impede growth of the market.

Compatibility concerns of smart lighting is another factor anticipated to restrain growth of the global smart lighting market over the forecast period. Smart lighting sometimes can be incompatible with traditional infrastructures as well as fittings, as the form factor and circuitry of these lighting is different. This further require replacement of switches. Likewise, all the fixtures of smart lighting related to existing or conventional fittings cannot always be used with all the lighting sources. Moreover, use of LED bulb in an enclosed housing may fail to effectively dissipate the heat, which could affect the lifespan of the LED lamp. Thus, these compatibility issues of smart lighting are limiting the market growth.

Figure 2: Global Smart Lighting Market Share (%), By Product Type, 2021

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Global Smart Lighting Market Segmentation:

The global smart lighting market report is segmented into Product and Region.

Based on Product, the market is segmented into Control Systems and Smart Lamps and Fixtures. Out of which, Control Systems is expected to dominate the global market over the forecast period and this is attributed to the increasing adoption of controlled systems to decrease consumption of energy. Factors such as performance, efficiency and customer value of energy can be improved with intelligent lighting control systems, which are used in several applications in various end-use segments including industrial, home appliance sectors, automobiles and others. Thus, growing adoption of control systems is driving growth of the segment.

Smart Lamps and Fixtures segment is also expected to witness significant growth in the near future and this is owing to the rise in use of smart solutions in various end-use industries. Smart LEDs are increasing being utilized in various industries. The smart lighting market is witnessing massive transformation in smart fixture applications, which is leading to a significant shift and impact on distribution channels, competitive landscape, business models and product offerings. Thus, this segment is likely to witness strong growth in the near future.

Global Smart Lighting Market: Key Developments

In June 2020, Lutron Electronics Co. Inc. announced the launch of Athena commercial lighting solution. The new solution offers superior control, advanced LED lighting technology along with simple app-based setup.

In May 2020, GE Current, started a new distribution center in the greater Atlanta region, and with the addition of this location, the company will offer same-day and next-day services to its control and lighting consumers in the region.

Global Smart Lighting Market: Key Companies Insights

The global smart lighting market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global smart lighting market are LG Electronics, Control4 Corp., Eve Systems GmbH, Lutron Electronics Co. Inc., Awox SA, Signify Holdings, Insteon (Smartlabs Inc.), Wyze Labs Inc., Crestron Electronics Inc., Sengled USA Inc., Cooper Lighting Solutions, General Electric Company, Wiz Connected Lighting Co. Ltd., and IKEA Systems BV.

*Definition:

A smart lighting system includes sensors, motion detectors, and lighting controls that can be controlled remotely. Many of these systems also integrate with other smart home systems. A smart light typically includes a microprocessor and LED module. It is also equipped with a constant-current LED driver that regulates the load of the LED array.