Smart Lighting Market, Share & Segmentation by Component (Hardware, Software, Services), By Installation Type, By Technology, By Application (Indoor Lighting, Outdoor Lighting), By Region, And Global Forecast 2024-2032

Smart Lighting Market Overview & Scope:

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The Smart Lighting Market Size was valued at USD 11.95 billion in 2023, and is expected to reach USD 40.09 billion by 2032, and grow at a CAGR of 14.44% over the forecast period 2024-2032.

The growth of smart lighting market is being fueled by smart cities. Cities are introducing smart streetlights to decrease energy usage and emissions, with some managing to achieve a 50% decrease. For example, having a 10-watt LED bulb that is used for 4 hours daily. During an average month, this bulb usually uses 1.2 kilowatt-hours of energy. Taking into consideration the standby power consumption and the increased connectivity to other devices, a smart bulb could increase its monthly energy usage by an additional 0.78 kWh. Showing that fact, traditional light bulbs have been reported to lose up to 90% of their energy as heat (as anyone who has attempted to replace an incandescent bulb can confirm). With a price of 14 pence per kWh, the smart light will only add around 10 pence to your monthly bill.

The smart home revolution is growing with a reported 27% increase in smart home adoption since 2020, according to YouGov. This increase is driven by increasing knowledge - one third of Americans currently have a good grasp of smart home devices, as opposed to 27% only two years ago. However, it's more than just gaining knowledge - individuals are also actively implementing changes. People under the age of 45 are taking the lead, with 29% owning smart lighting systems, in contrast to 22% of individuals over 45. Security is the top priority - smart security gadgets are the most sought-after smart technology at the moment, showing the emphasis on safety and peace of mind in the smart home industry. This trend shows a bright future for smart home technology as awareness, adoption, and user preferences develop.

Market Dynamics

Drivers

Rising Internet of Things (IoT) integration in smart lighting market

The Internet of Things (IoT) is revolutionizing lighting, transforming them from static fixtures into intelligent networks. Imagine controlling lights remotely using your smartphone, scheduling them to turn on at sunrise and off at sunset, or having them automatically adjust with sensors. This creates a smarter system with features like dimming, color control, and occupancy detection – all contributing to significant energy savings. These smart lights connect via protocols like Zigbee or Wi-Fi, allowing them to integrate seamlessly with smart home systems for a holistic control of your environment. This rise of IoT in lighting offers a trifecta of benefits: convenience, personalization, and sustainability. One key driver of this growth is the energy savings potential. Smart lighting systems utilize IoT-enabled sensors, bulbs, or adapters that allow users to manage their lighting with a smartphone or smart home platform. This enables features like occupancy detection, which automatically adjusts brightness based on room usage. Additionally, most smart lights are powered by energy-efficient LEDs. According to a study 70% of a building's total cost over its lifespan is from day-to-day operations, including energy use. Smart lighting can significantly impact this cost by ensuring lights are off in unoccupied spaces.  While regular LED bulbs offer some energy savings, smart lighting goes a step further by offering automation and customization, justifying the additional cost for many consumers. For instance, a typical household can save around USD 76 annually by switching to LEDs, but smart lighting offers the extra value of convenience and control over lighting ambiance. This integration of IoT with lighting technology is creating a smarter and more efficient future, with the smart lighting market poised for continued growth

Rise of Smart Homes Fuels Smart Lighting Market Growth

The growth of smart homes, driven by convenience and energy efficiency, is a major factor in the expansion of the smart lighting industry. This includes controlling lights using a smartphone or voice assistant, removing the need to search for a switch in the dark. Smart lighting works together smoothly with smart home systems, allowing for personalized experiences with dimming, color changes, and scheduling options. However, the advantages extend further than just convenience. Smart lighting includes energy-efficient elements such as occupancy sensors that adjust based on room usage and utilize energy-saving LED technology. The collaboration between smart homes and smart lighting is driving expansion in both industries. Although smart homes have great potential, the current rates of adoption indicate a need for a practical approach. Smart home devices have not become as common in households as smartphones and computers. Early adopters rank security as their main concern, with 77% of smart home users claiming these technologies enhance their quality of life by enabling features such as remote monitoring and security alerts. While smart lighting is appreciated, it appears to be of lesser importance compared to other factors.

This practical approach also applies to how consumers purchase smart home gadgets. 85% focus on specific functions or devices that meet their current needs, instead of striving for a completely integrated "smartest-possible" home. About 45% of individuals intend to purchase just one or two smart home devices, selecting items that address particular issues. An additional 40% acquire devices when necessary or when new features become available. This indicates that consumers carefully choose which smart features to incorporate into their homes, emphasizing products that solve existing problems. Users demonstrate this practical approach by managing their smart homes. At present, the main way to control smartphones is through individual apps (45%), with a smaller percentage using the controls on the device itself (18%). Control your smart speakers through voice commands.

Restraints

High initial costs in the smart lighting Market.

The smart lighting market faces a challenge due to the high initial expenses. Outfitting a whole household with necessary items can come at a high cost, especially when compared to standard lighting options. A traditional 60-watt incandescent bulb is priced at $1-$2, whereas a CFL bulb can cost $2-$10. Smart bulbs, on the other hand, come with a higher starting cost, with an average of $42 per bulb. Additionally, certain systems may need a hub or bridge in order to connect, resulting in additional expenses. Conventional lighting might have a lower initial cost, but it has a shorter duration. Incandescent bulbs have a lifespan of 1,000 hours, fluorescents can last between 8,000 and 10,000 hours, and halogens typically last 2,000 to 4,000 hours. These regular changes result in increased maintenance expenses over time. LED-based smart bulbs have a lifespan of 20,000-25,000 hours, which is 25 times longer than incandescent bulbs. This results in less replacements and potentially reduced costs for homeowners in the long run.

Concerns regarding security and privacy within the smart lighting industry.

Concerns regarding security and privacy are on the rise in the smart lighting sector. Consumers are concerned about their lighting systems being accessed without permission, as this could be used for pranks or break-ins. Moreover, smart lights could be at risk of privacy breaches due to the data they collect, including usage patterns and occupancy data. Manufacturers must implement strong security protocols and transparent data privacy practices to maintain consumer trust and support the smart lighting market's growth.

Segment Analysis

Based on Component, Hardware holds the largest market share in the smart lighting market at 40% in 2023. The growth of the hardware segment is being driven by the incorporation of smart lighting systems with the Internet of Things (IoT). Smart bulbs, luminaires, and light controls come with connectivity capabilities that allow users to remotely control and monitor lighting using smartphones, tablets, or other IoT devices. Advanced technology is making smart bulbs more advanced with features like changing colors, adjustable white light, and the ability to work with voice assistants and smart home systems. These progressions enhance the attractiveness of smart bulbs for customers, leading to higher sales and growth in the market segment. Smart bulbs, light fixtures, and lighting controls come equipped with various connectivity options. Philips Hue, LIFX, and Cree provide different choices for remotely controlling your lighting through smartphones, tablets, or other IoT devices. Smart bulbs are advancing beyond simple On/Off functions into impressive technological feats. Many currently come equipped with features such as the ability to change colors, adjustable white light (which allows for changing the warmth or coolness of the light), and support for well-known voice assistants like Alexa or Google Assistant. Moreover, they have the ability to smoothly link with smart home systems offered by Samsung Smart Things or Apple Home Kit. These developments are making smart bulbs more appealing to customers, resulting in higher sales and driving the hardware sector forward.

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Based on Application, indoor Lighting dominates the largest market share in smart lighting market with 60% of market share in 2023. Because of the growing trend of smart homes incorporating advanced technology to link and manage multiple devices and systems. Consumers are increasingly opting for smart lighting solutions to improve convenience, reduce energy consumption, and automate their households. This integration allows users to control indoor lighting through voice commands or a central smart home system, which helps in growing different industries. Smart room lighting systems allow people to adjust their lighting experiences based on their preferences. Low/high bay fixtures and A-type lamps have shown the most energy savings for indoor use. Most of the potential savings are linked to low/high bay and linear fixtures, commonly used in commercial and industrial buildings with high light output needs and long operating hours. These structures gain the most advantage from connected features, which are crucial for achieving maximum energy and cost savings in lighting. In 2018, LED lighting was more widely used in outdoor settings compared to indoor spaces, resulting in 40% of the total energy savings generated by LED technology. Implementing the most effective LEDs across all uses could lead to more than a quadrillion in yearly energy savings in just the outdoor industry, which is equal to around 9% of the electricity consumption in commercial buildings in 2018.

Regional Analysis

Asia Pacific dominates the largest share in smart lighting market with 38% of market in 2023, due to the growth of urban areas and a focus on smart cities. Fast urban growth leads to a need for lighting solutions that are energy efficient. Smart city initiatives are being heavily invested in by cities throughout Asia, with smart lighting playing a crucial role. It aids in saving energy, enhancing public safety, and improving the quality of life for residents. The market in China prospers because of urbanization, technological advancements, and the expansion of smart homes. Japan prioritizes efficiency, as eco-friendly smart lighting becomes popular in both residences and commercial establishments. This country, known for its advanced technology and high standard of living, is an ideal market for cutting-edge smart lighting products.

North America is the fastest growing in smart lighting market with 31% of market share in 2023. Innovation and an increasing emphasis on energy conservation are brightening the U.S. smart lighting market. The increasing popularity of smart homes and the Internet of Things (IoT) is driving consumer curiosity in smart lighting for residential and commercial spaces. In the U.S, Lumileds, a leading LED producer, has increased production to meet the growing demand. Government regulations promoting energy efficiency also brighten the prospects for smart lighting in the country.

Key Players

Some of the major key players Signify Holding, Legrand, ACUITY BRANDS, INC., ams-OSRAM AG, Honeywell International Inc., Zumtobel Group, Wipro Lighting , Lutron Electronics Co., Inc, LEDVANCE GmbH, Inter IKEA Systems B.V., Schneider Electric, ABB , Synapse Wireless Inc., Panasonic Corporation , Leviton Manufacturing Co., Inc. , Syska, BUILDING ROBOTICS INC. (BRI), A SIEMENS COMPANY, Helvar, LIFX , Nanoleaf, Sengled GmbH, and TVILIGHT Projects B.V. and others.

Recent Development

• In April 2024, Govee introduced two new intelligent floor lamps - the Floor Lamp 2 and Floor Lamp Pro. The Floor Lamp 2 provides enhanced lighting, works with Matter, and allows for personalized lighting options. The Floor Lamp Pro comes with 324 color and white light beads for the best lighting, a light bar that can rotate 300 degrees, and a built-in Bluetooth speaker.

• In February 2024, Siemens and Enlighted, a leading property technology company within Siemens, announced a strategic partnership with Zumtobel Group, a well-known international lighting solutions provider. This collaboration seeks to advance the adoption of smart building technologies, specifically IoT lighting, setting new standards for efficiency and sustainability in building operations worldwide.

• In January 2024, Legrand, a well-known global expert and leading provider of electrical wiring solutions, introduced the latest product in the radiant collection of smart lighting at the Consumer Electronics Show in Las Vegas, NV. This newest release includes upcoming Matter-compatible smart devices that will be launched in 2024. This development signifies the progression of Smart Lighting with Wi-Fi by incorporating the Matter standard into light switches, dimmers, and outlets. It highlights Legrand's continuous commitment to innovating in the field of intelligent lighting.

• In January 2024, Lutron Electronics Co., Inc. introduced Maestro dual controls equipped with integrated LED+ advanced dimming technology. The Maestro dual control models are a reliable option for controlling multiple lights or fans from one location, especially in places such as kitchens, closets, and bathrooms. The newest versions now include Lutron Electronics Co., Inc. LED+ advanced technology, providing smooth LED dimming without any disturbance, flicker, or shimmer, a choice favored by professional installers and their customers.