The market for smart lighting is divided into three main segments: hardware, software, and services. The hardware category was the largest in 2024, and lamps showed significant development potential between 2025 and 2034.The increasing demand for smart lighting hardware is attributed to the rising popularity of connected bulbs and fixtures that offer features such as color changes, dimming capabilities, and control via devices like smartphones or tablets. The software segment is projected to experience the most rapid growth during the forecast period, fueled by the escalating use of smart lighting for data-driven applications in critical areas. Applications play a vital role in managing lighting and linking them to platforms such as Alexa and Siri for voice command functionality. The ongoing trend of creating ambient environments and gathering data in smart cities is anticipated to bolster software growth.

The wired segment generated the highest revenue in 2024 and is projected to grow quickly in the coming years. Wired connections are necessary for distances over 30 feet, with Ethernet allowing connections up to 100 meters, while DALI, DSI, and DLVP can exceed 1000 feet. The growing use of smart lighting in commercial and industrial sectors is boosting the need for wired connectivity. Meanwhile, the wireless segment also shows strong growth potential, as it is favored by consumers for short-range connections. Wireless technologies like Wi-Fi, Bluetooth, and ZigBee link lighting fixtures to smartphone apps.

In 2024, the indoor segment represented the largest share of revenue, which can be further categorized into residential, commercial, and industrial applications. The residential sector is projected to experience significant growth due to the rising demand for smart bulbs that enable users to create various lighting atmospheres. Additionally, commercial and industrial environments are increasingly adopting smart lighting solutions to manage energy usage, employing integrated sensors to adjust lighting according to occupancy and ambient light conditions. The outdoor segment is expected to witness the most rapid growth, encompassing uses such as street lighting and outdoor architectural illumination. The increasing demand for energy-efficient outdoor lighting, along with the capability to monitor activities through connected cameras and sensors, are primary factors driving this sector, supported by government investments that bolster the trend.

In 2024, Europe dominated the market, securing the largest share of revenue. This region is leading the way in developing safety and consistent performance standards for particular indoor commercial smart lighting applications, such as garages, roadways, and parking spaces. The emergence of dedicated LED luminaires and LED replacement smart lamps represents significant growth opportunities within the lighting sector, driven by ongoing advancements in LED design and technology. While established smart lighting manufacturers consistently enhance their product lines, existing companies are broadening their offerings to enter the market.

Key players in the market are investing heavily in research and development to expand their product ranges, which will further propel the growth of the smart lighting sector. Market participants are also implementing various strategic initiatives to enhance their global presence, including significant developments such as new product introductions, contractual agreements, mergers and acquisitions, increased investments, and collaborations with other entities. Competitors within the smart lighting industry must provide cost-effective solutions to thrive and expand in an increasingly competitive and growing market landscape.