The smart lighting market is predicted to reach $27,064 million by 2023. the market growth is being driven by the rising interest of consumers toward automation technologies in lighting, including the internet of things (IoT), and increasing availability and affordability for smart automation technologies across the world. Besides, innovations in the lighting technology as well as a considerable rise in the sales of smart light-emitting diodes (LED) are aiding the market growth.
Insights on the market segments
The smart lighting market is segmented by source, communication, product, application, and service. Based on source, LED contributed the highest revenue to the market in 2016 and is also expected to witness the fastest CAGR during the forecast period. LED-based smart lighting solutions enable users to control the light digitally by deploying a microcontroller-based lighting architecture, which can be programed to control brightness, flickering control, and color variation.
Moreover, advancements in the LED technology and adoption of wireless lighting techniques and IoT are supporting the growth of the smart lighting market in this category. For instance, in 2017, Osram Licht AG launched Simplex, a LED-based smart control system that offers enterprise-level control and automation capabilities in small- and medium-sized settings.
Under the wireless lighting communication category, Wi-Fi led the smart lighting market in 2016 in terms of revenue contribution, and it is also expected to witness the highest CAGR during the forecast period. Under the service segment, the smart phone application category is projected to dominate the market during the forecast period, crossing the $17,000 million mark by 2023. However, the lighting as a service (LaaS) category is predicted to grow faster as compared to smart phone application.
Evolution of Zigbee technology supporting the market growth
Developed by a global consortium of companies to provide wireless solutions for energy management, Zigbee lets users control their home lighting from a smart device, such as a tablet or phone. Being cost-effective and energy-efficient, the technology is rapidly becoming popular among the smart lighting system manufacturers around the world.
Europe stands as the largest market
Globally, Europe was the largest smart lighting market in 2016, accounting for over 35.0% revenue share. However, during the forecast period, the sales of smart lighting solutions are predicted to witness the highest CAGR in Asia-Pacific (APAC). The growth in the APAC market can be attributed to several factors, including advancements in smart lighting technologies, rapid digitalization in industries, surging adoption of connected technologies in outdoor and indoor settings, and increasing investments in the domain. APAC displays a high potential for the adoption of smart lighting solutions as an alternative to traditional lighting systems, owing to the technological advancements being witnessed with respect to IoT and improvements in the network infrastructure of the region.
Moderate competition in the smart lighting industry
The global smart lighting market is moderately competitive, with key players coming up with new intelligent and connected lighting solutions frequently. Hubbell Lighting Inc., Cree Inc., Osram Licht AG, Koninklijke Philips N.V., Zumbotel Group AG, Schneider Electric SA, Digital Lumens Inc., Acuity Brands Inc., and Legrand SA are among the major players operating in the market.
Most of these manufacturers are actively engaged in executing inorganic and organic growth strategies. Some of them are acquiring cross-vertical expertise to target a larger market, while some are launching new products with advanced lighting technologies to maintain their stronghold in the smart lighting market.