According to a new study by Grand View Research, Inc, the global smart lighting market size is expected to reach USD 46.9 billion by 2028, growing at a CAGR of 20.4% from 2021 to 2028. The market growth is attributed to the rising trend of smart cities, smart homes, smart street lighting systems, and the need to implement energy efficient lighting systems.

Smart lights can be dimmed using various shades as per the need, can be scheduled to turn on/off, monitor the energy usage of the lighting, and connect via Wi-Fi, Bluetooth, SmartThings, Z-Wave, or ZigBee. Smart lights can be voice-controlled through integration with platforms such as Google Assistant, Amazon's Alexa, Apple's Siri or Microsoft's Cortana.

For example, smart streetlights in urban parking lots or roads ensure safety by connecting IoT devices to provide extensive coverage, environmental monitoring, parking and traffic management information, and urban surveillance. Smart lights are often integrated with sensors that turn them into a smart device point to gather information about activity patterns, daylight levels, occupancy, temperature changes, or humidity. This information has proven to be crucial for government departments to take appropriate action and monitor cities for unwanted activity.

Government policies encouraging energy efficiency and environmental protection, as well as strict regulations, discourage the use of incandescent bulbs, as the global lighting industry consumes about 19% of total electricity and produces about 6% of greenhouse gas emissions. In contrast, LED smart lights are highly efficient. They last significantly longer and contain no mercury content. Likewise, LED lights do not emit harmful greenhouse gases. This makes LEDs the preferred choice for suppliers and consumers.

1. Market Structure

The smart lighting market is divided into three segments, namely hardware, software and services. The hardware segment leads the market with over 57% revenue share by 2020. The smart light segment shows high growth potential from 2021 to 2028. The demand for the hardware segment is attributed to the rise in popularity of connected light bulbs and fixtures that can be used to change hues, dim lights, and switch on/off using control devices such as smartphones or tablets.

The software segment is expected to register the highest CAGR during the forecast period. The demand for smart lighting is attributed to the increasing adoption of smart lighting in key segments to fulfill data-driven needs. Moreover, every brand needs software applications that facilitate control of lights using smartphones or tablets. These apps also help in connecting smart lights with smart platforms such as Alexa, Crotona, and Siri to control them using voice commands. The immense popularity of creating ambience and helping in data collection in smart cities is expected to drive the growth of the segment over the forecast period.

2. Smart Connectivity

The wireless connectivity segment is expected to grow at the fastest CAGR of over 20% during the forecast period. Consumers who require small connectivity prefer wireless connectivity in smart lighting environments, making it the fastest growing segment during the forecast period.Wireless technologies such as Wi-Fi, Bluetooth, SmartThings, Z-Wave, or ZigBee connect lighting devices with smartphone apps to control the functionality of light bulbs. The residential segment primarily employs wireless technologies to control the hue and color of light fixtures in limited spaces for aesthetic purposes.

The wired connectivity segment emerged as the highest revenue contributor in 2020 and is expected to remain dominant over the forecast period. wired connectivity is required for ranges above 30 feet. As an exception, Ethernet facilitates wired connectivity up to 100 meters, while DALI, DSI, and DLVP provide connectivity beyond a 1,000-foot range. The increasing adoption of smart lighting in commercial and industrial spaces is driving the need for wired connectivity in the smart lighting space.

3. Application Areas

The indoor lighting application segment dominated the market and was the highest contributor in terms of revenue as compared to the outdoor lighting application. Indoor applications are further segmented into residential, commercial, and industrial. The residential segment is expected to grow at a high rate during the forecast period owing to the increasing popularity of smart bulbs and fixtures that can be controlled by the user to set different lighting moods.

In addition, the demand for commercial and industrial spaces is driven by the need to control lighting consumption, as office spaces or warehouses operate 24x7 and require regular power supply throughout the day and night. Installation of smart lighting with in-built sensors ensures that the lighting is controlled according to the