The lighting industry has evolved beyond just selling lightbulbs.
Traditionally Philips, Osram and General Electric were the three biggest brands in lighting. The growth of LEDs has opened the industry up to new competitors, particularly those with expertise in semiconductors such as Cree Inc. and Samsung Electronics. That has added to price pressure and eroded market share. The 10-year plus lifespan of an LED is killing the traditional light-bulb business, where in the past, manufacturers could depend on consumers buying replacements every three years. Poor industry performance is expected to continue over the next 5 years, as both contractors and homeowners are expected to increasingly opt for LED lighting systems over traditional industry products.
The replacement of today’s lighting infrastructure with LED products offers the potential for future connected lighting systems that could become a data-collection platform that enables greater energy savings in buildings and cities. Such connected lighting systems can not only drastically improve the energy performance of lighting and other building systems, but also enable a wide array of services, benefits, and revenue streams that enhance the value of lighting systems.
Connected light, which becomes digital and can be monitored from a distance, has remade the lighting industry. Pioneering efforts include Power over Ethernet (PoE) lighting in offices - in which power cables and light switches are no longer needed and connection is enabled with one Ethernet cable from the switch to the lighting fixture - and Indoor Positioning in retail spaces, where the lights in a shop can connect users to a guided shopping experience. The experience is enabled solely by lighting, without Wi-Fi or any other system. It is considered the most accurate indoor positioning system. When you use GPS, it is accurate up to 25 to 50 meters; with lighting, it's a few centimeters. For example, shoppers can find the precise location of the groceries on their list or be directed to promotions in a store.
As such, it's a revolution for the traditional lighting industry, which started with road and street lighting, expanded to offices and industry and then to retail and hospitality. As the price of LED fixtures goes down, the availability of connected lighting has also opened up to consumers.
Also known as “smart” or “networked” lighting, connected lighting has spread throughout the lighting industry as well as network and technology companies. Nontraditional lighting companies such as SAP, Google, Cisco, Apple and Microsoft are targeting the lighting landscape through network infrastructure familiar to them while partnering with existing lighting players such as Acuity, Philips and Osram who are familiar with the end-users and regulatory demands of the market.
Connected lighting is an offshoot of the Internet of Things (IoT), which is exploding in popularity as more devices get online. Gartner predicts that the number of smart lighting devices will increase from 50 million units in 2015 to 2.5 billion units in 2020, a 50-fold increase. Strategies Unlimited estimates that the 2016 smart lighting market will approximate $3 billion with majority of the installation coming from the indoor market and experience an expected annual growth rate of 25% year over year from 2014 to 2022.
Priority Metrics Group can conduct the necessary custom market research and provide the insights needed for your company to succeed in this rapidly changing industry.
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