---

Market Overview

---

The Smart Lighting Market is projected to reach USD 49.37 billion by 2028, growing at a CAGR of 20.52% during the forecast period (2023-2028), with an estimated size of USD 19.42 billion in 2023.

Smart or connected lighting refers to LED-based systems equipped with sensors and controllers that are networked (wired or wireless). These systems enable communication among lighting products and data transmission. Smart lamps, bulbs, and luminaires are LED lighting solutions that can be connected, customized, scheduled, and remotely controlled. Lighting controls include sensors, user interfaces, controllers, and light management software.

Consumers may adopt energy-efficient LED technology more rapidly due to its societal benefits, which may accelerate the replacement of inferior compact fluorescent or halogen lighting technologies.

The demand for smart lights has grown significantly in both commercial and residential spaces because of their ability to connect with IoT devices and generate various ambient lighting effects through smartphones or tablets. Smart lights can be dimmed with different color tones based on the situation, scheduled for on/off times, track energy consumption, and connect with other devices via Wi-Fi, Bluetooth, SmartThings, Z-Wave, or ZigBee.

Office spaces have also emerged as common applications for smart lighting. In today’s business world, owners and managers prioritize the well-being of employees. By adopting smart lighting, offices can provide bright light, improving visibility and reducing eye fatigue. The color of the light can also enhance mood and comfort.

Favorable government regulations concerning conventional lighting and energy consumption in regions such as the United States, the European Union, China, and India are expected to drive the demand for connected LED lighting.

However, the slow growth of the smart lighting market poses challenges for entrepreneurs. A failed market entry can result in significant sunk investments and reputational damage. To address these concerns, manufacturers need to consider consumer perspectives on smart home technologies and smart lighting products specifically.

The emergence of COVID-19 disrupted production and supply chains, impacting industrial output and the capacity for light manufacturing in key hubs. However, as people spent more time at home, there was an increased inclination to upgrade interiors, which positively affected the market. The growing use of LEDs in homes and the penetration of smart home technology are expected to further drive market growth in the coming years.

---

Market Segmentation

---

The market is segmented based on various factors, including product type and geography.

Segmentation by Product Type
Control System – Wired, Wireless
Smart Lamps and Fixtures

Segmentation by Geography
North America – United States, Canada
Europe – United Kingdom, Germany, France, Italy, and Rest of Europe
Asia-Pacific – China, Japan, India, and Rest of Asia-Pacific
Latin America
Middle East and Africa

By product type, smart lamps and fixtures accounted for the largest share of 51.86% in the smart lighting market in 2022. This segment was valued at USD 8.67 billion in 2022 and is projected to reach USD 26.59 billion by 2028. It is also expected to showcase the highest compound annual growth rate (CAGR) of 21.29% during the forecast period. Smart bulbs offer not only energy efficiency but also contribute to reducing light pollution, aligning with government policies such as the ban on incandescent light usage. Advanced smart lighting sensors optimize visibility and safety in public spaces and can be remotely adjusted based on weather conditions, traffic patterns, and ongoing events. Some smart bulbs, like the Philips Hue Bridge, connect to smartphones through home automation hubs, while others bypass middleware and directly connect to users’ phones or tablets via Wi-Fi, such as the LIFX models. Others rely on Bluetooth connectivity within a limited range for control functionality.

Government regulations mandating the use of LEDs are driving market demand in various regions. For example, in the United States, energy-saving requirements mandate that common types of light bulbs must achieve 45 lumens per watt. Incandescent bulbs typically produce about 15 lumens per watt, halogen incandescent bulbs offer around 20 lumens per watt, CFL bulbs provide 65 lumens per watt, while LEDs produce 80-100 lumens per watt using significantly less energy. Additionally, the decline in LED prices has further accelerated the adoption of smart lighting solutions.

Governments worldwide are swiftly phasing out inefficient lighting sources through performance standards, labeling, and incentive programs. In Europe, the transition to LED technology began over a decade ago and has been reinforced by recent updates to the Ecodesign Directive and the Restriction of Hazardous Substances Directive by the European Union. These updates will effectively eliminate all fluorescent lighting by 2023.

The Southern African Development Community (SADC), consisting of 16 African nations, has adopted a regionally harmonized lighting standard that will fully transition to LED in the coming years. The East African Community (EAC) is also phasing out fluorescent lighting in six member nations, while Southeast Asian countries are implementing similar regulations. This regulatory environment is expected to drive market growth.

In terms of geography, Europe currently holds the largest share, accounting for 32.39% of the smart lighting market in 2022. The segment’s value in Europe reached USD 5.41 billion in 2022 and is projected to reach USD 15.56 billion by 2028, with a compound annual growth rate (CAGR) of 19.97% during the forecast period. However, it is the Asia-Pacific region that is expected to register the highest CAGR of 21.84% during the same period.

The increasing adoption of the Internet of Things (IoT) is expected to drive the growth of the lighting market in China, leading to the expansion of connected smart lighting systems in the country. According to GSMA estimates, China may account for approximately 4.1 billion IoT connections by 2025, which represents almost one-third of all worldwide IoT connections. Smart lighting systems are anticipated to be the primary beneficiaries of this trend in the forecast period.

Japan has witnessed the introduction of various smart home products tailored to its market by global tech giants like Google and Amazon. Despite the decrease in the penetration rate of traditional home appliances year-on-year (YoY), the smart home industry holds unlimited potential due to the increasing integration of AI-powered products and services in Japanese households.

The market for smart lighting in Japan is also driven by the growing adoption of smart devices, particularly smartphones, which conveniently connect to IoT devices. The Japan Smartphone Security Association (JSSEC) estimates that the number of smartphone users in the country may reach 68.8 million by 2022.

In India, the demand for smart lighting is expected to grow, fueled by the rising preference for features like voice recognition and remote operation, as well as the exceptional experience offered by smart home automation. Additionally, the increased adoption of LED lights across various sectors such as residential, healthcare, and commercial spaces including hotels and workspaces, coupled with rising disposable income, are factors that are likely to drive the growth of smart lighting devices in the future.

Other countries in the Asia-Pacific region, such as South Korea, Thailand, Singapore, Malaysia, Sri Lanka, Bangladesh, Australia, and Indonesia, also demonstrate high potential for gaining a significant share in the smart lighting market.

---

Competitive Landscape

---

The smart lighting market is characterized by intense competition and features a number of prominent players. However, many companies are bolstering their presence in the market by securing new contracts and acquiring other firms. Key players include Signify Holding, Control4 Corp. (Snap One LLC), Wyze Labs Inc., Eaton Corporation, and Savant.

In February 2023, Signify played a crucial role in transforming the German municipality of Eichenzell into a forward-looking smart city through the implementation of intelligent street lighting. By utilizing its BrightSites solution, Signify facilitated fast and wireless broadband connectivity throughout the city. This infrastructure enables Eichenzell to support next-generation Internet of Things (IoT) applications and future 5G densification. Signify installed LED lighting, which is managed by the Interact City System. Through a centralized dashboard, Eichenzell can effectively monitor and control all lighting fixtures.

In January 2023, GE Lighting, a subsidiary of Savant, announced the expansion of its smart home ecosystem called Cync. Cync introduced its comprehensive Dynamic Effects entertainment lineup, featuring a wide range of capabilities such as 16 million colors, pre-set and customizable light shows, on-device music synchronization, and various other features. Additionally, following a successful launch last year, Cync has expanded its Wafer light fixture line, providing consumers with more options to enhance their smart home experience.

Key companies profiled in this report include Control4 Corp. (Snap One LLC), Lutron Electronics Co. Inc., Signify Holding, Wyze Labs Inc., Sengled, GE Lighting (Savant Systems Inc.), Inter IKEA Holding BV, Acuity Brands Inc., Hubbell Incorporated, Crestron Electronics Inc., Insteon (Smartlabs Inc.), EGLO Leuchten GmbH, Eve Systems GmbH, LG Electronics Inc., Wiz Connected Lighting Co. Ltd, Wipro Lighting Limited, Xiaomi Corporation, LIFX (Feit Electric).

---

Recent Industry Developments

---

In February 2023, Signify supplied LED street lighting, intelligent poles, and a connected lighting system to the industrial parks in Huanggang City, located in Hubei Province, China. The city selected Signify’s BrightSites smart poles, Philips LED streetlights, and the Interact connected lighting system. This combination provides energy-efficient LED lighting of excellent quality, along with the capability for two-way communication on a cloud-based platform.

In January 2023, Lutron announced its plans to introduce new solutions and enhance existing products that enable audiovisual (AV) professionals to offer high-quality lighting control that is future-ready. These developments aim to empower clients to achieve their interior design aspirations without compromising on aesthetics and functionality. With these advancements, users will no longer need to choose between the visual appeal of their space and an outstanding lighting experience.

---

Key Questions Answered

---

What is the projected size of the Smart Lighting Market?

The Smart Lighting Market is expected to reach USD 19.42 billion in 2023 and grow at a CAGR of 20.52% to reach USD 49.37 billion by 2028.

What is the current market size of the Smart Lighting Market?

In 2023, the Smart Lighting Market is expected to reach USD 19.42 billion.

Who are the major players in the Smart Lighting Market?

Signify Holding, Control4 Corp. (Snap One LLC), Lutron Electronics Co. Inc, Wyze Labs Inc., and Sengled are the key companies operating in the Smart Lighting Market.

Which region is experiencing the fastest growth in the Smart Lighting Market?

Asia-Pacific is estimated to have the highest compound annual growth rate (CAGR) over the forecast period (2023-2028) in the Smart Lighting Market.

Which region holds the largest market share in the Smart Lighting Market?

In 2023, Europe accounts for the largest market share in the Smart Lighting Market.