Smart Lighting Opens Development Possibilities for the LED

Smart lighting is a rapidly growing trend in the lighting industry. Not only does it offer unparalleled convenience and flexibility, but it is also extremely energy-efficient, helping to reduce energy consumption and minimize costs. In a smart lighting system, users can easily control the brightness and color temperature of their lights using their smartphones or other smart devices. Additionally, smart lighting systems are equipped with sensors that can automatically adjust brightness depending on external factors such as ambient light and motion. Thanks to these features, smart lighting has the potential to completely transform the way we think about our homes and our environments.

Looking at the current lighting market, smart lighting has already become a new product that manufacturers such as Philips are rushing to release. It was a hot topic not only at the Light+Building exhibition in Germany but also at the recent Guangzhou International Lighting Exhibition earlier this month. The smart LED lighting market is still in its early stages of development, but manufacturers are eager to expand. The market anticipates entering into a rapid growth period within one to two years.

Table of Contents

High Value Added

Smart lighting is the marriage between electronics and networking. It is not only capable of realizing smart lighting system controls, self-regulation, and mood lighting, but also can connect with Internet platforms. This creates a higher value-added service to users, including health regulators, location trackers, shopping recommendations, and advertisements, among others.

The lighting industry is clearly heading toward a major transformation. Smart lighting is a segment of smart building technology. It requires the cooperation of the entire supply chain in order to develop.

Smart Lighting Opens up room for growth

In regard to the questions about the continued growth of the LED industry, the dispute in the market stems from the following points:

1) How long can the rapidly developing retrofit market support the industry?

2) Exactly how long is the lifetime for LED luminaires?

3) After the retrofit tide is over, what will the next growth driver for the industry be?

In terms of the first question, statistics gathered by the U.S. Department of Energy (DOE) show that LED lighting penetration rate has still not reached 5 percent in 2013. If the penetration rate is able to double this year, retrofit demand will last for another three to four years. As for LED lighting lifetime, it is not the most important factor lighting manufacturers consider during the rapid development period for LED lighting. Manufacturers instead focus on reducing costs before satisfying lifetime standards (20,000-30,000 hours). Moreover, after the industry matures, manufacturers are pushing towards launching products with the best lifetime.

Moreover, LED smart lighting is able to increase ASP and added value to products. It increases the room for development far beyond that of conventional lighting, meaning industry growth will continue long after the retrofit period has passed.

In China, the electricity cost of an LED driver with smart control capabilities is about RMB 10. The retail price of a luminaire with this type of power source is 20 to 30 percent more expensive than regular luminaires. Smart capabilities, therefore, can increase a normal lighting product’s premium by at least 20 percent (this is without consideration of additional complicated systems and higher configurations).

Without consideration of high-value-added products, the smart lighting industry has the market space to add an additional RMB 60 billion from 2014-2015. Smart lighting market value could reach RMB 80 billion by 2018, and surpass RMB 200 billion within five years based on compound annual growth rate (CAGR) 30 percent calculations.

Whether we are looking to save money on our energy bills or simply improve the comfort and aesthetics of our living spaces, smart lighting offers an innovative new solution. If you have any questions about LED lighting, welcome to contact us directly.