Power Over Ethernet (POE) Solutions Market Trends

Growth Drivers

• Surge in demand for LED lights: LEDs are widely integrated into smart building systems, inculcating intelligent control of the lighting system for the conservation of energy. The amalgamation of the Power over Ethernet technology in LED lighting helps in connecting, monitoring, and controlling light fixtures utilized in smart building solutions. According to the Department of Energy, residential LEDs, particularly products rated with “Energy Star”, utilize at least 75% less energy. These factors are leading to increased demand for the LEDs. For instance, according to The Observatory of Economic Complexity, the worldwide trade of light-emitting diode lamps reached USD 6.47 billion in 2023.

• Rising adoption of Internet of Things: Power over Ethernet remarkably influences the deployment of IoT by streamlining the device management. PoE eradicated the need for separate wiring and outlets for power. This makes it extremely easy to deploy and connect IoT devices, particularly in locations that are difficult to access. According to the World Economic Forum, industrial IoT alone adds USD 14 trillion of financial value to the economy globally. These factors are propelling the market growth during the forecasted period.
   
• Increasing usage of PoE in retail display: With the rising establishment of retail stores, PoE is extensively used to attract customers. It is used in retail displays at the aisles, entrances, store windows, shelves, etc. Dump bins, freestanding shelves, countertops, and windows are some of the most common places where displays are used in a retail store. Also, the advent of AI-powered solutions renders remarkable benefits to retailers by optimizing resource utilization. AI is fueling the adoption of Power over Ethernet for establishing faster and more resilient networks in the retail sector. The data published by the World Economic Forum in January 2023, Artificial Intelligence services in the retail sector are anticipated to reach USD 31 billion by 2028.

Challenges

• High Initial Cost of Installation - Insertion of power over Ethernet (POE) networks demands a significant initial financial outlay. This is owing to the high expense of Ethernet switches, which necessities power source equipment (PSE) against the traditional analog, along with the PSE's maintenance costs. In addition, switches, Ethernet cables, injectors, splitters, and PoE connections are used. The fact that the cost of procuring these components is included in overall start-up costs is a key impediment to the market's potential to grow in terms of revenue.

• Limited power output and incompatibility: A PoE connection usually connects with multiple devices. That means, if one fails, all other devices connected to the stream shut down. Also, some of the devices, particularly those with higher power requirements, might not be compatible with the older PoE standards.