Trend Force predicts in its latest survey that the global LED smart street lamp market (including only luminaires and a single lighting control system) will usher in rapid development and will grow at a compound annual growth rate of 8.2% by 2024.
LED lighting manufacturers, such as Signify, Acuity Brands, Zumtobel, Leotek (a subsidiary of Lite-On Group), and Unilumin, have released new outdoor smart lighting products and integrated smart lighting solutions, which may improve smart LED The penetration rate of the street lights. However, Trend Force pointed out that downstream LED lighting demand is highly related to the overall economic situation.
Analyst Christine Liu pointed out that governments around the world are trying to mitigate the impact of the COVID-19 pandemic on industries through fiscal policies, smart city construction, and new infrastructure investment. Among these government efforts, in terms of scale, China and North America have made the largest investment in roadside infrastructure. According to data from the US Census Bureau, as of June 2020, the US government has invested US$42.9 billion in roadside infrastructure. Efforts to stimulate the economy through government expenditures are expected to drive the demand for outdoor LED street lights.
Driven by Huawei and Tencent, Chinese companies have become the main driving force for the development of smart street lights.
Generally speaking, smart light poles have six basic functions: smart lighting, information release, security monitoring, environmental detection, charging stations,and small 5G base stations. Smart lighting products ranging from modular LED lights to a single light controller are necessary components to achieve these six functions. Trend Force’s smart street light construction project cost analysis found that the average selling price (ASP) of the smartest street light pole with the highest specifications was US$6997.90, of which 2.6% came from smart lighting equipment, and the average selling price was US$182.5.
Although China is the main driving force for the development of smart street lights in the world, large-scale city-level projects are expensive and time-consuming. This is mainly due to the huge land area in China and the huge differences in the needs of various local governments. In addition, the municipal government usually tends to outsource smart street lighting projects to private companies with sufficient resources. These companies are not necessarily proficient in the design and manufacturing of smart street lighting equipment, so they must cooperate with other partners to complete these projects.
On the other hand, because smart street lighting projects involve the Internet of Things and telecommunications, LED lighting manufacturers must cooperate with major technology companies to execute these projects. Therefore, companies with strong resource integration capabilities, such as Huawei and Tencent, are expected to occupy a major share of smart street lighting projects in China.
Trend Force believes that in the smart street light supply chain if the downstream reach is wider, more and more business opportunities will be found. In order to enter the existing supply chain, LED lighting manufacturers must enhance their service system capabilities, streamline their LED lighting product portfolio and improve the overall service quality, to add more value to existing competitive advantages. At the same time, the government needs to formulate transparent standards for smart street lights and develop a comprehensive smart city blueprint to ensure the healthy development of the LED smart street light industry.