• by Chuck Martin , Staff Writer, October 22, 2015

Because the Internet of Things is so massive, with many billions of devices expected eventually to be connected, sometimes a little perspective pops up to highlight some relationships.

I’m talking about lightbulbs here or, more specifically, LEDs.

The global shift from traditional light bulbs to energy saving LED technology, underway for some time, is providing the opportunity to add connectivity to the next generation of lighting systems.

Connected LEDs are the most promising vertical market segment in the Internet of Things, according to a new report from IoT analyst firm Berg Insight.

For some perspective, Berg points out that around 2 billion lamps will be sold in the U.S. this year. By comparison, the combined sales of home entertainment devices and household appliances will be fewer than 200 million units.

From last year to 2023, the global share of LED lights sold will rise from 15% to 74%, according to Berg.

“There are currently some 40 billion lamp sockets worldwide and by the next decade, three out of four new lamps installed will be LEDs,” said Tobias Ryberg, senior analyst at Berg Insight. “Once you add connectivity to this equation, you will have the number one volume application for IoT.”

While less than 1% of bulbs are estimated to be connected in the U.S. today, that will grow to “double digits, or maybe more” within five years, Ryberg told me from Sweden today. “I can’t see why bulbs wouldn’t be connected.”

From a marketing perspective, this could have a major impact on how messaging is delivered. Connected lights effectively create a network or platform on which messaging can flow, based on precise consumer location information.

“The key question is how consumers will interact with connected LEDs,” said Ryberg. “If the preferred method is to use the smartphone as a remote for controlling lamps in the near proximity, Bluetooth has a very strong chance to win. On the other hand, if all lights are integrated into a smart home network, technologies such as ZigBee and Thread will have a very bright future.”

Connected LEDs also will become widely adopted for street lighting, but since the total installed base in the U.S. is less than 100 million, yearly shipments will most likely not exceed 10 million units, according to Ryberg.

But even at that, it’s a large potential number of additional connected objects.