Connected Lighting Analysis Report 2025: Market to Grow by a CAGR of XX to 2033, Driven by Government Incentives, Popularity of Virtual Assistants, and Strategic Partnerships

Key Insights

The connected lighting market is experiencing robust growth, driven by increasing adoption of smart home technologies, the need for energy efficiency in commercial buildings, and the rise of smart city initiatives. The market, estimated at $15 billion in 2025, is projected to expand significantly over the next decade, with a Compound Annual Growth Rate (CAGR) of approximately 12%. Key growth drivers include the decreasing cost of LED lighting and smart sensors, coupled with advancements in networking technologies like Power-over-Ethernet (PoE) and robust network control systems. The residential segment currently holds a significant market share, fueled by consumer demand for convenience and personalized lighting experiences. However, the commercial and industrial building segments are poised for substantial growth, driven by the potential for energy savings, improved operational efficiency, and enhanced security features. The integration of connected lighting with other smart home and building management systems further enhances its appeal across various applications, including transportation and smart infrastructure projects.

While the market faces certain restraints, such as the high initial investment costs associated with system implementation and concerns surrounding data security and privacy, these are being mitigated by the emergence of cost-effective solutions and improved cybersecurity measures. The market is highly competitive, with major players like Philips Lighting, Eaton, and Osram vying for market dominance alongside emerging technology providers. Geographic expansion, particularly in developing economies in Asia Pacific and the Middle East & Africa, presents significant growth opportunities. Segment-wise, Power-over-Ethernet (PoE) technology is expected to gain traction due to its simplified installation and power delivery capabilities. Network control systems are becoming increasingly sophisticated, enabling remote monitoring and management of connected lighting networks, further enhancing the value proposition. The ongoing shift towards sustainable and energy-efficient solutions makes connected lighting a crucial element in the future of illumination and smart environments.

Connected Lighting Trends

The connected lighting market is experiencing phenomenal growth, driven by the convergence of LED technology, advanced networking capabilities, and the increasing demand for smart building solutions. The market, valued at several billion dollars in 2024, is projected to reach tens of billions by 2033, exhibiting a robust Compound Annual Growth Rate (CAGR). This expansion is fueled by several factors, including the decreasing cost of connected lighting systems, the growing adoption of smart home and building technologies, and the increasing awareness of energy efficiency and operational cost savings. The market is witnessing a shift towards more sophisticated systems incorporating features like data analytics, remote control, and integration with other smart home/building functionalities. This report analyzes the market from 2019 to 2033, with a focus on the forecast period 2025-2033, using 2025 as the base and estimated year. The historical period (2019-2024) provides valuable context for understanding the current trajectory of the market. Millions of connected lighting units were shipped globally in 2024, and this number is anticipated to increase significantly over the forecast period, driven by increased adoption across diverse sectors. Key market insights reveal a strong preference for energy-efficient solutions, particularly in commercial buildings where operational costs are a significant concern. The increasing availability of cloud-based platforms and robust data security measures are also contributing to market expansion, addressing earlier concerns about cybersecurity risks. Moreover, the ongoing development of interoperable standards is further encouraging wider adoption across different systems and brands. The seamless integration of lighting with other smart home technologies, like security systems and climate control, is emerging as a key driver of growth, leading to the creation of holistic smart environment solutions. The residential segment, driven by increasing consumer awareness and disposable incomes, is expanding significantly, while the commercial and industrial segments demonstrate continued growth due to the substantial potential for efficiency gains and cost reduction.

Driving Forces: What's Propelling the Connected Lighting Market?

Several key factors are propelling the growth of the connected lighting market. The rising adoption of smart home and building automation systems is a significant driver, with consumers and businesses seeking to improve energy efficiency, security, and convenience. The increasing availability of energy-efficient LED lighting coupled with decreasing costs makes connected lighting a more attractive option than traditional lighting. Government regulations and incentives promoting energy conservation are further fueling market expansion. The integration of advanced features such as occupancy sensing, daylight harvesting, and remote monitoring enhances the appeal of connected lighting, enabling intelligent control and optimization of energy consumption. The rising adoption of Internet of Things (IoT) technologies creates opportunities for seamless integration with other smart devices, fostering the creation of interconnected and responsive environments. Furthermore, advancements in data analytics enable businesses to gather valuable insights from lighting data, facilitating better operational efficiency and maintenance planning. The growing demand for improved workplace productivity and enhanced occupant experiences in commercial buildings is driving the adoption of smart lighting solutions which can be customized to specific tasks and environments. This demand, coupled with advancements in networking technologies (such as Power over Ethernet) offering reliable and cost-effective connectivity, ensures the continued growth of this dynamic sector.

Challenges and Restraints in Connected Lighting

Despite its impressive growth trajectory, the connected lighting market faces several challenges. High initial investment costs for infrastructure and installation can be a deterrent for some consumers and businesses, particularly smaller entities. Concerns about cybersecurity vulnerabilities and data privacy are also significant barriers, requiring robust security measures and transparent data handling practices. The complexity of integrating various lighting systems and protocols from different manufacturers can create interoperability challenges, hindering seamless implementation and management. The need for skilled labor for installation and maintenance can also impact widespread adoption, particularly in regions with limited technical expertise. Furthermore, the potential for system failures and malfunctions due to network outages or software glitches poses a risk, emphasizing the importance of reliable backup systems and robust support services. Maintaining consistent network connectivity across diverse locations, especially in industrial settings, can also pose a significant hurdle. Finally, the evolution of technology and standards necessitates continuous updates and upgrades, potentially leading to additional costs and complexities for users.

Key Region or Country & Segment to Dominate the Market

The Commercial Building segment is poised to dominate the connected lighting market over the forecast period.

• High Adoption Rate: Commercial buildings offer significant potential for energy savings and operational efficiency improvements through smart lighting solutions. This is leading to high adoption rates across various sectors, including offices, retail spaces, and hospitality venues.
• Return on Investment (ROI): The cost savings from reduced energy consumption and enhanced operational efficiency provide a strong return on investment for businesses, driving the implementation of connected lighting systems.
• Technological Advancements: The continued advancement of networked lighting systems and control platforms tailored for commercial environments is further enhancing adoption rates within this segment. These platforms frequently offer advanced features like integrated sensors, data analytics capabilities, and customizable lighting scenarios.
• North America and Europe: These regions are currently experiencing the highest adoption rates due to higher levels of technological maturity, increased awareness of energy efficiency, and a robust ecosystem of connected lighting providers. However, Asia-Pacific is expected to experience the fastest growth in the coming years.
• Specific applications within Commercial Buildings: Demand is high in office spaces for improved productivity and employee well-being, in retail spaces for enhanced customer experience and targeted marketing, and in hospitality environments for creating immersive and customized atmospheres.
• Market size: The commercial building segment is projected to account for billions of dollars in revenue, representing a significant portion of the overall connected lighting market. This growth is expected to outpace other segments like residential and industrial, maintaining its leading position throughout the forecast period.
• Competitive Landscape: The commercial building segment attracts significant investment and competition from major lighting manufacturers, creating a dynamic and innovative market environment.

Growth Catalysts in the Connected Lighting Industry

The connected lighting industry's growth is significantly fueled by the increasing demand for energy efficiency, the rising adoption of smart building technologies, and the continuous innovation in LED technology, along with decreasing costs. The integration of connected lighting with other building management systems creates further opportunities for growth, enhancing overall building efficiency and improving operational strategies. Government initiatives and subsidies supporting energy conservation also drive the market's expansion.

Leading Players in the Connected Lighting Market

• Philips Lighting
• Eaton
• Toshiba
• Anixter
• Silicon Labs
• OSRAM
• GE Lighting
• Wink
• LIFX
• Insteon
• SYLVANIA
• Leviton
• Lutron
• Cree Lighting
• Feit
• Belkin
• Softdel

Significant Developments in the Connected Lighting Sector

• 2020: Several major manufacturers announced new partnerships to enhance interoperability standards in connected lighting systems.
• 2021: Significant advancements in the use of AI and machine learning in lighting control systems were demonstrated, optimizing energy efficiency and improving user experience.
• 2022: The introduction of new energy-efficient LED technologies further lowered the cost of connected lighting solutions.
• 2023: Increased focus on cybersecurity and data privacy measures for connected lighting systems.
• 2024: Several new standards and protocols for connected lighting were adopted, promoting interoperability and reducing fragmentation in the market.

Comprehensive Coverage Connected Lighting Report

This report provides a detailed analysis of the connected lighting market, offering insights into market trends, growth drivers, challenges, key players, and future projections. It encompasses a comprehensive overview of the market from 2019 to 2033, with a focus on the forecast period 2025-2033 and using 2025 as the base year. The report segments the market by type (Network Control, Power-over-Ethernet), application (Residential, Commercial Building, Industrial Building, Transportation, Other), and key geographic regions. This in-depth analysis aims to provide stakeholders with the necessary information to make strategic decisions in this rapidly evolving market. Millions of units are projected to be sold within the forecast period, highlighting the significant growth potential of the connected lighting market.

Connected Lighting Segmentation

• 1. Type
  • 1.1. Network Control
  • 1.2. Power-over-Ethernet
• 2. Application
  • 2.1. Residential
  • 2.2. Commercial Building
  • 2.3. Industial Building
  • 2.4. Transportation
  • 2.5. Other

Connected Lighting Segmentation By Geography

• 1. North America
  • 1.1. United States
  • 1.2. Canada
  • 1.3. Mexico
• 2. South America
  • 2.1. Brazil
  • 2.2. Argentina
  • 2.3. Rest of South America
• 3. Europe
  • 3.1. United Kingdom
  • 3.2. Germany
  • 3.3. France
  • 3.4. Italy
  • 3.5. Spain
  • 3.6. Russia
  • 3.7. Benelux
  • 3.8. Nordics
  • 3.9. Rest of Europe
• 4. Middle East & Africa
  • 4.1. Turkey
  • 4.2. Israel
  • 4.3. GCC
  • 4.4. North Africa
  • 4.5. South Africa
  • 4.6. Rest of Middle East & Africa
• 5. Asia Pacific
  • 5.1. China
  • 5.2. India
  • 5.3. Japan
  • 5.4. South Korea
  • 5.5. ASEAN
  • 5.6. Oceania
  • 5.7. Rest of Asia Pacific