The combination of costs having fallen 50 percent in the last 18 months and the rising efficiencies of LED lamps means a boost in chip sales A number of small start-up companies have begun offering hardware and software products for smart street lighting systems.

According to Research, in this challenging emerging market, many of these start-ups have already failed, others have been acquired by larger lighting companies, and a few are flourishing on their own.

Some of the larger control and lighting companies are developing their own products for this market, which will put pressure on smaller companies that have not yet secured a reliable revenue stream.

At the same time, new lamp options have recently become available for street lights, most notably LEDs. The market for these lamps is also in a period of transition. Dramatically falling costs and rising efficiencies of LED lamps are driving up sales. Costs have fallen as much as 50 percent over the last 18 months and are expected to continue falling for years to come.

LED lamps allow for better dimming control than standard street lights, and their electronics allow for easy integration of control nodes. Rising sales of LED lamps will therefore drive up the adoption of smart street lighting systems.

Expects the market for smart street lighting to grow steadily over the remainder of this decade. Shipments of smart street lighting systems, which will be under 200 worldwide for 2012, will reach more than 1,100 in 2020. Shipments of communications nodes, meanwhile, will rise from 550,000 this year to 4.8 million in 2020.