Smart Lighting Market Analysis Europe, North America, APAC, South America, Middle East and Africa - US, China, Germany, UK, Japan - Size and Forecast 2024-2028

Smart Lighting Market Size 2024-2028

The smart lighting market size is estimated to grow by USD 26.56 billion, accelerating at a CAGR of 20.85% between 2023 and 2028. The market is experiencing a transformative shift driven by several pivotal factors. The adoption of energy-efficient LEDs and the emergence of smart lighting technologies are revolutionizing the industry landscape. With the advent of IoT and human-centric lighting systems, smart lighting is advancing towards enhancing user experience and optimizing energy usage. However, challenges such as technological complexities in LED implementation and the high cost of LED fixtures pose obstacles to widespread adoption. Nevertheless, the market is actively innovating to address these challenges and meet the rising demand for customizable, energy-efficient lighting solutions. This market research and growth report also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, this market analysis and report includes historic market data from 2018 to 2022.

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Market Report Scope

What will be the Size of the Market During the Forecast Period?

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Market Dynamics

In the realm of modern home automation, they have emerged as a significant trend. These systems, consisting of LED lights and digital controls, offer numerous benefits. They enable consumers to save energy through dimmable features and automated schedules. The use of consoles and mobile applications allows for convenient control, ensuring lights are turned off when not in use. Additionally, integration with other smart home devices, such as voice assistants and motion sensors, enhances functionality and convenience. The market is witnessing rapid growth due to increasing consumer awareness and the availability of cost-effective solutions.

In the rapidly evolving market of smart home technologies, governments' initiatives towards energy efficiency and the proliferation of the Internet of Things (IoT) are significant drivers. With 2023 as the base year, our comprehensive analysis identifies these factors as key catalysts for market growth. Homeowners increasingly seek to minimize energy consumption while enhancing their living experiences. One such area of investment is Heliport Lighting, an essential component of IoT-enabled infrastructure. Heliport Lighting systems not only ensure safe and efficient helicopter operations but also contribute to energy savings through intelligent lighting control and optimization. As companies refine their marketing strategies to gain a competitive edge, a holistic understanding of these drivers will prove invaluable.

Key Market Driver

The emergence of smart lighting is a key driver boosting the market growth. It optimizes electricity usage by controlling lighting, heating, and cooling, including remote appliance management. It curtails electricity costs by judiciously scheduling light activation. These networks offer diverse features like automatic room entry activation and color adjustments. These systems operate autonomously and can be programmed to respond to user commands. Equipped with sensors, smart lights adapt to people and objects, ensuring appropriate illumination.

LED adoption promises energy savings and integration with smart and IoT technologies. Manufacturers frequently upgrade LED technologies to align with IoT advancements. Rising global interest in it fosters vendor partnerships and a global ecosystem. Efficient LED lighting and potential applications in commercial and urban settings are poised to drive the global market's growth during the forecast period.

Significant Market Trends

The advent of IoT is a key trend shaping the market. IoT is reshaping how individuals and entities, including businesses and governments, interact with the physical world. Advances in wired and wireless technologies, coupled with sensor innovations, are expediting the integration of IoT into smart lighting solutions. These solutions, exemplified by smart bulbs and luminaires, provide enhanced control and interactivity compared to conventional lighting. IoT empowers these fixtures to generate valuable data, facilitating energy conservation and insights into building occupancy patterns and other system utilization.

The proliferation of smart device applications and cloud-connected lighting systems is expedited by IoT architectures, enabling vendors to create next-gen IoT solutions for homes and offices. Numerous vendors offer IoT-based smart lighting solutions, like TVILIGHT Projects BV's IoT-enabled smart street lighting system, incorporating CitySense Lite motion sensors, an IoT Gateway network interface device, and a DigiHub IoT cloud platform. The mounting emphasis on adopting IoT-enabled devices for efficient lighting management is expected to propel the global market's growth in the forecast period.

Major Market Challenge

Technological challenges related to LEDs is a key factor hindering the growth of the market. LEDs have limitations, including color inconsistency and thermal issues over time. Thermal problems can degrade an LED's lumen output, influenced by its color and operating conditions. Technical LED specifications present challenges:

Moreover, moisture: LEDs work indoors and outdoors. Outdoor installation may allow moisture ingress, causing short circuits and requiring LED replacement. Installation Complexity: Most LEDs need step-down voltage for optimal performance and can't handle line voltage. This poses challenges in industrial areas with voltage fluctuations, as LEDs are sensitive to such variations. Heat Sensitivity: LEDs are heat-sensitive, impacting light output and lifespan when used in enclosed spaces. High temperatures within industrial facilities can exceed LED driver case temperature limits (Tc point), leading to premature driver failure. The limited adoption of LEDs in industrial and outdoor settings, compared to other applications, may challenge the growth of the global market during the forecast period.

Market Segmentation

By Application

The commercial segment will account for a major share of the market's growth during the forecast period. Commercial establishments such as restaurants, bars, hotels, industrial facilities, offices, and malls use smart lighting.  Due to the implementation of strict government rules on energy use and CO2 emissions, the market is dominated by the market.

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The commercial segment was valued at USD 5.51 billion in 2018 and continued to grow until 2022. Commercial establishments are incorporating these systems to reduce energy consumption and integrate their ecosystem with IoT. To set up a network of connected bulbs that can be controlled with one system, businesses have taken the initiative to install intelligent lighting systems. The data generated by the system can provide insights to optimize service delivery and operations, which will enable the efficient utilization of energy and reduce costs.  Hence, such factors are fuelling the growth of the segment which in turn drives the market growth during the forecast period.

Market Regional Insights

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Europe is estimated to contribute 33% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The European market experienced substantial growth in 2022, driven by the adoption of energy-efficient, comfortable, and technologically advanced solutions in commercial and residential spaces. Major European markets include Germany, the UK, France, Belgium, Denmark, Italy, and the Netherlands. Digital workspaces and smart homes are increasingly popular, with property owners investing in LED lights, dimmers, and halogen lighting technologies and controls. New installations and replacement of outdated systems, such as halogen incandescent bulb and CFL bulbs, are accelerating market expansion. Ballasts, LED drivers, and PoE lighting solutions are essential components. Sensors, switches, and relay units facilitate remote operation and energy conservation. Smart city projects and IoT devices utilize standard protocols like ZigBee and AI-empowered products. Light manufacturing and healthcare sectors also benefit from LED technology and lighting controls. Energy conservation, energy conservation directives like the Ecodesign Directive, and the GSMA's role in promoting smart lighting are key factors driving the market growth in Europe during the forecast period.

 Major Market Market Players

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Signify- The company offers smart-lighting, such as Smart A19 and BR30, which is controlled by Lightcloud controller and ideal for use in offices, hospitality properties, healthcare providers, and senior care or assisted living facilities.

The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

Acuity Brands Inc., Current Lighting Solutions LLC, Dialight Plc, Eaton Corp. Plc, Helvar Merca Oy Ab, Honeywell International Inc., Hubbell Inc., IDEAL INDUSTRIES Inc., Legrand SA, Leviton Manufacturing Co. Inc., Lightwaverf Technology Ltd., Lutron Electronics Co. Inc., OSRAM Licht AG, RAB Lighting Inc., Savant Systems Inc., Siemens AG, Synapse Wireless Inc., Wipro Ltd., and Zumtobel Group AG

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Segment Overview

The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2023 for the following segments 

• Application Outlook 
  • Commercial
  • Residential
  • Public infrastructure
  • Others
• Component Outlook 
  • Hardware
  • Software
  • Services
• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Argentina
    • Brazil
    • Chile 

Market Analyst Overview

In the realm of modern home automation, these systems have emerged as a significant trend. These systems, integrating LED lights, digital controls, and connectivity, offer numerous benefits. They enable users to save energy through automated lighting, adjust brightness and color temperature to suit moods and activities, and even synchronize lighting with music or movies. The market is driven by increasing consumer awareness of energy efficiency and the proliferation of IoT technology. Companies like Philips Hue, LIFX, and Syska LED are leading players in this market, offering comprehensive solutions that cater to various consumer needs. 

The market is witnessing significant growth driven by the rapid adoption of smart home technology and the increasing integration of Internet of Things (IoT) devices. This market evolution is fueled by factors such as rising disposable income and the growing demand for energy-efficient lighting solutions. Consumers are embracing compact fluorescent and LED bulbs, which offer superior efficiency compared to traditional incandescent light bulb. these technologies utilize advanced control systems and circuitry to provide customizable lighting experiences, enhancing convenience and energy savings. Additionally, innovations in form factor and heat sink design ensure compatibility with various fixtures, including enclosed fixtures. As the demand for smart home automation continues to rise, the global market remains poised for further expansion.

This market report extensively covers market segmentation by Application (commercial, residential, public infrastructure, and others), Component (hardware, software, and services), and Geography (Europe, North America, APAC, South America, and Middle East and Africa). The market encompasses the use of advanced solutions in commercial spaces, including offices, healthcare facilities, industrial sites, and outdoor areas. These establishments predominantly adopt these systems due to energy conservation regulations and the integration of IoT. Key components include LED lights, LED drivers, ballasts, dimmers, switches, and relay units. New installations incorporate sensors and PoE lighting solutions for remote operation.

Moreover, digital workspaces and smart homes also benefit from this technology. Gateways and standard protocols, such as ZigBee, and AI-empowered products enable seamless connectivity with IoT devices in the India LED lighting market. Energy-efficient LED technology, with high lumens per watt, offers cost savings and improved control through features like dimmers, timers, and occupancy sensors. Smart city projects and outdoor lighting are significant applications driving growth. Regulatory influences such as the Ecodesign Directive and GSMA regulations shape market dynamics. The transition from halogen incandescent bulbs and CFL bulbs to LED technology is accelerating. Light manufacturing and office spaces in India also utilize smart lighting systems for energy conservation and enhanced control.

What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2023 and 2028
• Precise estimation of the market forecast and size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Market growth analysis across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough analysis of the market’s competitive landscape and detailed information about companies
• Market forecasting of factors that will challenge the growth of market companies

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