In the next few years, the smart lighting market is expected to grow exponentially. According to a study conducted by the market research company Global Market Insights, it is very clear that the scale of the commercial market in this field, the study said that by the end of 2025, the market share of the intelligent lighting industry will exceed the total valuation of 23 billion US dollars. It is expected that the compound annual growth rate from 2019 to 2025 will exceed 15%.
Strict government regulations around the world have promoted the smart lighting market to limit the use of inefficient lighting technologies. Governments around the world have been making efforts to phase out inefficient lamps, such as incandescent lamps and halogen lamps, to promote the use of environmental lighting.
Recently, the European Union (EU) announced new regulations requiring the phase-out of tungsten halogen lamps and compact fluorescent lamps by 2020. According to the new “Ecological Design Law” new regulations, the maximum standby power is 0.5W, which will encourage the sale of more energy-efficient lamps in the region. At the same time, local government authorities also provide tax rebates and subsidies to promote the use of more efficient lighting technologies worldwide, which is the main driver of market growth.
The rapid growth of smart city development plans and the number of investments has further accelerated market adoption. With the development of industrialization and urbanization, energy consumption among cities has also increased.
It is estimated that cities account for more than 60% of the world’s energy consumption, and lighting alone consumes 19% of the world’s electricity. In order to reduce energy consumption and effectively manage resources, governments are using advanced technological solutions to manage assets and resources more effectively. This encourages the development of global smart city programs, which will gather demand for the smart lighting industry.
However, compared to traditional lighting alternatives, the high cost of smart lighting solutions has become a major constraint on the growth of the smart lighting market. In addition, the security issues associated with the use of networked lighting and smart lighting systems will also hinder market growth.
From the perspective of products, hardware accounted for more than 80% of the smart lighting market in 2018 and is in a leading position. The growth of the smart lighting market is mainly due to the widespread adoption of smart bulbs and networked lighting systems in residential and commercial areas. Integrating advanced technologies such as Bluetooth, ZigBee, and Wi-Fi into lighting solutions is one of the main factors driving market growth. This allows smart bulbs to be controlled through mobile applications or home and building automation hubs, and individual bulbs can be programmed to change the output as required.
In addition, the cost-effective nature and energy efficiency of smart light bulbs are increasing their demand in the market. More than 250 million smart bulbs are expected to be sold by 2025.
Within the forecast time frame, the compound annual growth rate of the software market will exceed 22%. The market is driven by the increasing popularity of global smart home and business automation solutions. In the past five years, the integration of IoT devices in residential and commercial areas has suddenly increased. Consumers are using connected devices to reduce energy consumption and remotely manage their devices from remote locations.
Intelligent lighting control software allows users to control the intensity of lights and lamps based on infrastructure, environment and light intensity. In addition, the emergence of lighting as a service solution and the proliferation of mobile applications for controlling lighting have also become the main drivers of the software market growth.
Because it is more reliable and stable, cable technology occupies a major share of the smart lighting market, accounting for more than 70% in 2018. The growth of the market is due to the increasing popularity of wired communication technology in the field of outdoor lighting. The powerful features of wired technology and the high reliability and control capabilities of lighting solutions make it an ideal solution for outdoor lighting applications. The large-scale adoption of PLC technology in outdoor lighting applications and the large-scale adoption of DALI in indoor lighting applications also contribute to market growth.
Excellent performance, such as sensitivity to electromagnetic interference and high reliability under extreme environmental conditions, have also driven the demand for this technology. However, the flexibility and limited scalability of the wired solution have become the main limitations of market growth.
During the forecast period, the compound annual growth rate of wireless technology will exceed 21%. The growth of the market is driven by the increasing popularity of wireless connections in lighting applications. Lighting manufacturers are changing from traditional lighting control protocols to complex wireless lighting control systems. Wireless technology provides a natural grid for connectivity, improves operational efficiency, and helps develop new business channels.
Compared with traditional wired technology, wireless technology also has many advantages, including flexibility, cost-effectiveness, ease of installation and security, thereby increasing its demand in the commercial and residential market space.
Indoor lighting accounts for more than 78% of the smart lighting market. The growth of the market is due to the growing demand for energy-efficient lighting solutions in the residential and commercial sectors. Enterprises and homes are using smart lighting solutions to reduce energy consumption because it can save energy by using demand-based lighting management systems. The intelligent lighting management system detects and collects real-time data about people, light field sensing and daylight to optimize the required light output. At the same time, the system also supports indoor navigation, which allows directional access and improves information in high-traffic buildings.
During the forecast period, outdoor lighting will grow at a compound annual growth rate of approximately 20%. The growth of the market is driven by the global smart city development plan. Intelligent lighting solutions are widely used in highways and highways, bridges and tunnels, and public places to reduce energy consumption. The increasing demand from government authorities to optimize energy use and remotely manage lighting resources has further accelerated the industry’s adoption.
Europe will dominate the smart lighting market in 2018, with a share of over 35%. Strict government regulations in the area restrict the use of inefficient lighting technologies. The regional government has announced a multiple phase-out plan for inefficient lamps. In addition, the government also promotes the use of LED lights by freely distributing LED lights and tax rebates and subsidies. This has encouraged the adoption of markets in the region. At the same time, the smart city development plan in Europe and the stable macroeconomic conditions in the region will promote market growth. During the forecast period, the Asia-Pacific region will grow at an annual rate of over 19%. The growth of the market is due to the large-scale adoption of LED lights in the region. The decline in the price of LED lights and the government’s supportive measures are the main factors driving the demand for LED lights in the region. The increasing use of smart and connected lights in the region has brought many opportunities for market growth. The growing industrialization and urbanization in the region will also drive the demand for smart lighting.
Major suppliers in the smart lighting market include Philips Lighting, Osram, GE Lighting, Cree, Schneider Electric, Echelon, Acuity Brands, Silver Spring Networks, Deako and Tvilight, etc. Construction, mergers and acquisitions, and new product technology research and development will become the main markets Strategy.
With the increasing popularity of home automation systems in the residential and commercial sectors, major industry giants are already launching innovative products to maintain consistency with the current customization needs of the consumer base.
Speaking of this, Legrand, one of the most important experts in the smart lighting market, launched a series of new lighting control products at the 2018 Consumer Electronics Show. The latest series is called Radiant Collection, which includes a variety of lighting and scene controllers, panels, dimmers, plug-in modules and light switches. It is worth mentioning that these devices are compatible with the OpenSmart Foundation 1.3.1 security standard and can be seamlessly integrated with Samsung’s SmartThings, Amazon Alexa, and Google Assistant and other smart home platforms.
Obviously, the above-mentioned Legrand case illustrates the fact that participants in the global smart lighting market are mobilizing their resources to develop advanced and high-end products at any time to survive in this growing business field.
The strategic cooperation relationship between well-known enterprises will affect the development trend of the intelligent lighting industry.
Digital Lumens is one of the major players in the smart lighting market. It recently partnered with Schneider Electric to use interconnected technology and provide its customers with enhanced automation and energy management solutions. The company’s open API enables its LightRules software platform to access a series of real-time sensor data and controls from solutions such as Schneider Electric’s SmartStruxure, including energy consumption, temperature, and occupancy monitoring.
In addition, the API can also be integrated with third-party building management systems. As part of the agreement, Schneider Electric will support the company’s sensor-based connected lighting and next-generation analysis suites, which will help Digital Lumens consolidate its position in the smart lighting industry in the next few years.
In June 2017, Australia-based Vivid Technology announced that it has signed a memorandum of understanding with Honeywell Building Solutions Australia to provide its LED lighting technology to a range of strategic products. It is worth mentioning that Vivid has worked with Honeywell in the past and has a good track record of successfully completing a joint project between RMIT University and Northern NSW Health in Northern Melbourne.
According to the latest memorandum of understanding, the two companies will use each other’s marketing plans, technology enhancements and product roadmaps to gain a competitive advantage in Australia’s overall smart lighting industry.
Industry participants continue to strengthen cooperation to expand the North American smart lighting market share.
As one of the largest smart lighting market participants in North America, Acuity Brands has worked with Silver Spring Networks to develop networked street lighting control solutions. Obviously, the solution will help utilities, smart cities, and large-scale park operators to renovate their aging lighting infrastructure and improve operational efficiency. As part of the agreement, Silver Spring’s standards-based Gen5 IPv6 network platform will be integrated with Streetlight Vision smart city management software. Industry experts pointed out that this integration will further upgrade the LED lighting system, thereby greatly reducing energy consumption.
Driven by numerous alliances among industry competitors, North America has more than 28% of the smart lighting market share. In addition to cooperation, the expansion of the North American smart lighting market can also be attributed to the growing prominence of smart cities in the region.
In the past five years, smart lighting has become one of the most disruptive technologies. Advanced LED lamps can significantly save costs in terms of energy costs. Enterprises provide smart lighting as part of an IoT system to achieve a highly connected infrastructure. This provides users with additional control rights to effectively manage intelligent lighting systems. As cheaper and smarter lamps quickly replace fluorescent lamps (CFL) and incandescent bulbs, smart and connected digital lighting using the Internet of Things is expected to bring excellent intelligence and functionality to lighting systems.
As modern smart city infrastructure provides enhanced connectivity between multiple administrative modules including law and order, healthcare, and transportation, plans to develop such smart cities have proliferated. Therefore, this will provide countless business expansion opportunities for intelligent lighting market participants in the next few years.
In summary, with the increasing global demand for reducing energy consumption and costs, and the growing demand for efficient lighting systems, the commercialization potential of the entire smart lighting industry is worth looking forward to.