The lighting industry has seen a rapid shift in the past five years as the industry has moved to adopt light emitting diode (LED) products. This shift has bought with it intense price competition that has proven difficult for vendors, with some having chosen to exit the market entirely. Fortunately, the vendors who have weathered the newfound price competition have found that the LED lighting industry has bought many new opportunities that would not have been possible using traditional lighting technology.
What are the big stories in 2018?
Data-driven lighting design
Smart lighting systems will continue to enable IoT applications in 2018. As the prevalence of sensors and connectivity increases in lighting systems, holistic lighting solutions will be designed for the explicit purpose of collecting, analyzing, and utilizing the data gathered by the lighting system, thus driving efficiency and productivity gains within the spaces these holistic solutions are used.
This data-driven approach to lighting design will go hand-in-hand with an increased focus on smart lighting apps by vendors, and unique use cases which can be created by leveraging a holistic lighting solution comprised of sensors, controls, connectivity, and intelligence.
Standardization in the communication protocols used by vendors in lighting control and sensing will allow further compatibility across the marketplace, driving additional growth for connected, smart lighting systems. IHS Markit expects many vendors will look to utilize the Bluetooth mesh standard, which was unveiled to the lighting industry at LuxLive in November 2017. This standard has been widely anticipated as a way for lighting vendors to deliver a lighting system that can truly act as a platform on which to run applications. Bluetooth has a number of advantages as a ‘go-to’ communication protocol, including the low cost and ubiquity of modules, as well as the fact that the technology is widely understood by engineers in the lighting industry.
In addition to communication protocols, standardization in products themselves to enable plug-and-play connectivity of sensor modules is expected to increase, as vendors provide ‘future-proofed’ luminaires. This allows customers to install the latest LED fixtures today, while keeping the option to easily add sensors to their systems tomorrow.
In the residential sector, smart lighting systems will continue to integrate voice-control capabilities as the prevalence of voice assistants such as Amazon Alexa, Google Assistant, and Apple Siri continue to gain market penetration in the smart home space. Voice control via personal assistants creates a compelling use case for residential smart lighting, and it sidesteps the need to use a mobile app or separate control device.
Platforms and partnerships
Not all lighting companies are looking to (or are able to) offer a complete lighting solution. Indeed, there are many who specialize and excel in particular product categories. In 2018, the need for platforms and partnerships will increase as lighting moves from a product-based industry to a service- and data-based industry.
Energy efficiency still king
Despite all of the above, and even though some remain reluctant to admit as much, energy efficiency will ultimately remain king in 2018. While improvements to productivity and efficiency are much more valuable to a company than simple energy savings, it is the initial energy savings companies can see by switching to LED that drive adoption of sensor-based connected lighting systems.
IHS Markit estimates that in 2017, only 8% of the total installed base of luminaires was LED. This leaves 92%, or around 35 billion lighting fixtures, still to be upgraded to LED. Needless to say, the energy savings made by switching to LED will continue to finance the growth of smart lighting systems for the foreseeable future.
Other stories expected to impact 2018 include: consolidation for lighting companies as vendors look to offer a complete lighting solution, including the fixtures, controls, sensors, and software; an increased importance placed on applications that drive productivity, including asset tracking and space utilization apps, all enabled by the aforementioned total lighting solution; PoE to continue to grow market share in new-build construction; horticultural lighting to move from niche market to mainstream market; and LED to take >75% of total market revenues for the first time.