Electric Lamp Bulbs and Tubes

SIC 3641

Companies in this industry

Industry report:

This industry classification covers establishments primarily engaged in manufacturing electric bulbs, tubes, and related light sources. Important products of this industry include incandescent filament lamps, vapor and fluorescent lamps, photoflash and photoflood lamps, and electrotherapeutic lamp units for ultraviolet and infrared radiation. Establishments primarily engaged in manufacturing glass blanks for bulbs are classified in SIC 3229: Pressed and Blown Glass and Glassware, Not Elsewhere Classified.

Industry Snapshot

The light bulb and electric lamp industry provides a practical means of converting electric energy into usable light. Just under one-fourth of all the electricity sold in the United States is used for lighting. Besides illuminating businesses, schools, and homes, light bulbs are used in a plethora of applications and products, including automobiles, flashlights, sports fields, medical equipment, airport runways, and emergency exit signs.

According to the U.S. Census Bureau, companies engaged in the manufacture of electric lamp bulbs and tubes shipped $1.9 billion worth of products in 2009, down slightly from shipments of $2.1 billion in 2008 and significantly lower than the $2.7 billion in 2006. This decrease reflected the inconsistent economy as well as foreign competition. Due to the high maturation of many market segments, manufacturers attempted to boost profits with high-tech lamps and bulbs that could burn longer, brighter, and more efficiently.

Several states passed laws in the late years of the first decade of the 2000s that prohibited the manufacture of the traditionally used, high-watt incandescent bulbs. In addition, in 2007 the Energy Independence and Security Act was passed, which included a phase-out of all incandescent light bulbs, beginning with 100-watt bulbs in January 2012 and ending with 40-watt bulbs in January 2014. These bulbs were to be replaced by compact florescent lights (CFLs), although by the start of the 2010, LED (light-emitting diode) lights had become a major sector of the industry was well.

In the early years of the first decade of the 2000s, the electric lamp bulbs and tubes industry was characterized by intense competition. However, it was helped by a strong U.S. economy that led to increased new housing starts and a long-awaited resurgence in commercial office building construction. A major downturn in housing, coupled with continued record-high gasoline prices amid political and economic turmoil abroad and in the United States later in the decade, however, slowed the economy and led to minimal revenue gains. While technological innovations remained the heart of the competitive atmosphere, major manufacturers increasingly focused on strategic marketing campaigns to ease customer confusion and showcase their products in a crowded market. Moreover, customer perceptions of lighting products in general were targeted to promote electric lamp bulbs and lighting as a decorative item rather than a commodity.

Organization and Structure

The industry produces thousands of different bulbs, tubes, strobes, and flashes. However, the three primary products sold by U.S. electric lamp manufacturers are incandescent, fluorescent, and electric discharge lights and bulbs. By the early 2010s, the LED was its way to establishing itself as an alternative option.

Incandescent bulbs produce light by heating a filament to a high temperature. The filament, which is usually composed of tungsten, emits a yellowish glow as electricity flows through it. The bulb is filled with an inert gas, such as argon, to keep the filament from melting and evaporating. Most incandescent bulbs are designed to operate at between 30 and 150 watts of power and at 120 volts of electricity. They typically produce between 750 and 2,500 lumens of light (a lumen is the amount of light that falls on each square foot of a 1-foot radius sphere when a candle is placed at the center).

One reason incandescent bulbs are popular is because they are inexpensive to purchase. A standard 60-watt bulb usually costs around two dollars and provides about 750 to 1,000 hours of light. Incandescent bulbs are also relatively compact, operate well at low temperatures, and offer a high degree of optical control. The primary disadvantage of this type of lamp, however, is low efficiency. A typical 100-watt bulb, for example, dissipates about 95 percent of its electric current as heat. Less than 5 percent is actually converted to light, resulting in high operating temperatures and superfluous energy consumption.

A second type of incandescent bulb is the halogen lamp, which became popular during the 1980s. Halogen bulbs are filled with iodine or bromine gas, which prolongs the filament's life by reducing tungsten evaporation. A standard halogen bulb lasts about 3,000 hours at 25 lumens per watt. Some halogen lamps also use less energy. Because these bulbs emit ultraviolet radiation and can get extremely hot, however, they are often encased in a heat resistant material like quartz within the outer bulb. For this and other reasons, halogen lamps cost as much as five or even ten times more than traditional tungsten bulbs.

The second major category of electric bulbs is the fluorescent bulb and tube sector, which serves as the primary electric light source in the United States. Most fluorescent lamps are tube shaped, have a tungsten filament or tungsten coils, and are filled with mercury vapor and argon gas. When electricity is applied to the lamp, an electrode at one end emits electrons that travel through the bulb, react with the mercury, and emit ultraviolet radiation. The radiation reacts with a phosphor coating on the inside of the bulb to produce visible light. Fluorescent lamps are usually tubular, but also come in compact rod, ring, and globe shapes.

Although they are larger than incandescent bulbs and cost more to produce, fluorescent lamps are more energy efficient and have a longer life. Compact florescent lamps that can be substituted for standard incandescent bulbs, for example, produce between 80 and 100 lumens per watt. Incandescent bulbs, in contrast, deliver only 14 to 18 lumens per watt. Compact fluorescents also consume about 75 percent less energy than a standard incandescent and can burn for up to 6,000 hours. These lamps sold at retail for about $19 to $24 in the early years of the first decade of the 2000s. The only drawback of compact fluorescent bulbs is that retailers have limited supplies available, and there is not as much variety as with conventional incandescent fixtures.

Electric discharge lamps, the third major industry category, produce light through a gas or a metallic vapor. The color and intensity of the light can be altered by using different types of gas and varying the pressure in the bulb. Gases such as neon, argon, krypton, mercury, and xenon allow electric discharge lamps to be used in a variety of applications. Mercury lamps, which deliver an efficient 65 lumens per watt, are widely used to light industrial spaces and roadways. Although electric discharge lamps are expensive, slow starting, and usually produce an unappealing bluish-greenish glow, they are long lasting, energy efficient, and compact. Recent developments have brought neon lamps into the home sector with the development of microelectronic transformers, which are necessary for the operation of neon lamps and are smaller than a typical man's wallet.

Background and Development

Oil lamps were used for illumination in the earliest known civilizations and were a common artificial light source for more than 6,000 years. Gas lamps became popular early in the nineteenth century, particularly in Europe. Neither gas nor oil lamps, however, were sufficient to light entire rooms or mimic daylight.

The first incandescent electric lamp was produced in 1802 by Humphrey Davy, an English chemist. Davy heated strips of platinum in the open air using an electric current. The strips soon burned up, and the lack of a satisfactory source of electric power made the concept impracticable. Similar efforts during the succeeding 70 years caused some scientists to declare the development of a long burning electric lamp impossible.

Good vacuum pumps that removed air from glass bulbs made the creation of the first commercially viable incandescent lamps possible. Joseph Wilson Swan, of England, and Thomas Edison, of the United States, separately invented the first successful light bulbs in 1878. Both lamps used carbon filaments in evacuated glass bulbs. Edison received most of the credit for the invention, however, because he subsequently invented much of the equipment needed to implement his lamp in a practical lighting system.

Edison's first lamp provided the same amount of light as 16 candles and produced about 1.4 lumens per watt. However, technological advances soon improved Edison's original bulb. Notably, in 1911 tungsten was introduced as a filament. In 1913 filaments were coiled for the first time, and bulbs were filled with inert gas. Beginning in 1925, bulbs were frosted on the inside to emit a diffused glow instead of a glaring brightness. Improvements in energy flow and bulb pressure helped boost standard 40-watt bulbs to 1,000 hours of life and 14 lumens per watt by the early 1960s. Incandescent lamps with more power were developed by the 1960s as well.

The first electric arc lamp was patented in 1845 by Thomas Wright. Wright's carbon arc lamp led to the development in the late 1800s of electric discharge bulbs that could produce 10 times the light emitted by carbon filament incandescent lamps. These early bulbs were largely limited to use as heavy duty streetlights, however, because they had to be continuously fed with carbon rods. The mercury arc lamp, developed in 1901, eliminated many drawbacks of early electric discharge bulbs. Likewise, the introduction of neon tubes in 1920 led to the popularization of electric discharge lamps for advertising signs. Sodium lamps developed during the 1930s became popular for various outdoor and industrial applications.

The fluorescent lamp was invented by Frenchman Alexandre Edmond Becquerel in 1859, but it was not introduced commercially in the United States until 1938. Nonetheless, by the early 1950s, fluorescent lamps had overtaken incandescent bulbs as the primary source of artificial light in the United States. Superior efficiency, long life, and greater light output drove the growth of this important industry segment. By the 1960s, in fact, manufacturers were offering more than 50 shapes and sizes of fluorescent lamps ranging from 4 to 240 watts in power.

Booms in residential, commercial, and institutional construction from the 1950s to the 1970s vastly expanded U.S. light bulb markets. By the early 1980s, about 60 U.S. producers shipped $2 billion worth of various electric lamps and had more than 22,000 employees. Following a development lull in the late 1970s and early 1980s, renewed demand pressed industry sales past an impressive $2.8 billion per year by 1986. This figure reflected average annual growth of nearly 10 percent between 1982 and 1986. Although sales increased at a more tepid pace through 1988 to about $3.2 billion, a U.S. recession in the late 1980s and early 1990s depressed industry revenues back below $3 billion.

Going into the late 1990s, U.S. electric lamp manufacturers hoped to benefit from slowly strengthening commercial and residential construction industries. Nevertheless, demand from builders was expected to remain suppressed as contractors reeled from the building glut of the mid- and late 1980s. Instead, bulb makers focused on increasing profits through sales of advanced lamps that could reduce energy consumption, improve lighting, boost longevity, and minimize adverse environmental impacts. Compact fluorescent and halogen bulbs, particularly, offered solid growth potential.

The National Energy Security Act of 1992 effectively mandated the use of such advanced bulbs. The act sought to prevent the sale of inefficient fluorescent light bulbs beginning in 1994, and other energy-inefficient bulbs by 1995. It banned most standard four- and eight-foot fluorescent light tubes, some incandescent reflector lamps, and many types of flood lamps. Similarly, the Environmental Protection Agency's (EPA's) "Green Lights" voluntary conservation program was designed to encourage corporations to install new lighting. Full national participation, according to the EPA, could reduce total U.S. electric consumption by 10 percent and slash lighting electricity requirements 50 percent, resulting in an annual $18.6 billion savings. By mid-1998, consumers had to pay approximately 9 percent more for their bulbs, in no small part due to the implementation of the act.

Energy-conservation efforts intensified during this period in response to heightened consumer demand for environmentally sound products. In 1999, the U.S. EPA modified its Subtitle C hazardous waste rules, specifically targeting fluorescent lamps containing the toxic pollutant mercury. The ruling maintained the federal ban on high-mercury-volume products and, at the federal level, standardized a potpourri of often-confusing and conflicting rules enforced at the state level that should help manufacturers systematize their disposal and recycling procedures. While the ruling reduced the costs to manufacturers for recycling mercury-based lamps, the new classification of these bulbs as "universal waste" demanded that they be labeled as such, a development that worried some manufacturers who feared that such labeling would discourage consumers. The EPA estimated that the move would increase the rate at which mercury-filled lamps were recycled to 50 to 70 percent. In the late 1990s, about 1 billion fluorescent lamps were discarded annually.

In an effort to maintain a competitive edge in the mature light bulb market, firms rapidly shifted their attention to the marketing arena. Manufacturers, aware that most customers purchased bulbs at discount retail stores whose shelves were stocked full of bulbs of all different sorts, wanted to stave off consumer anxiety regarding such an array of choices, which could lead individuals to simply purchase whatever bulb cost less rather than scrutinize the intricate variations manufacturers worked so hard to develop. As a result, creative packaging and marketing became a primary industry priority. By color-coding similar product lines and advertising lamps with different durations and features from a more utilitarian standpoint, manufacturers enabled customers to narrow their choices and make more informed purchasing decisions. In addition, industry players placed a premium on delivering elaborate, user-friendly marketing displays to retail outlets, the logic being that such displays can feature the range of company products while showcasing and explaining standard wattage variations for regular incandescents as well as the company's more expensive and decorative feature products. Most in-store displays of this type were fairly costly to ship due to their bulk and fragility, so they were placed primarily by the larger manufacturers who maintained the financial leverage to manufacture and ship them.

Longer-lasting and more costly halogen lamps faced negative publicity in the 1990s, including the revelation that these lamps had been responsible for more than 100 fires since 1992. Nonetheless, sales of halogen lamps rose 8 percent in the late 1990s, benefiting largely from an industry-wide effort to push lighting as a decorative item. Some analysts believe the trend for high-value decorative lighting was fairly commensurate with the overall strength of the U.S. economy in the late 1990s. As a result, demand for this type of lighting cooled somewhat in the weakened economy of the early years of the first decade of the 2000s. Nonetheless, all manufacturers expected that more efficient and longer-lasting compact fluorescent and halogen lamps would take on increasing prominence in the light bulb industry. In other efforts, bulbs were increasingly manufactured to fit the same type of socket across a broad range of product lines.

Incandescent bulbs remained the anchor of the industry, accounting for about 90 percent of all bulb sales in the early twenty-first century. However, sales of incandescent bulbs remained flat throughout the early years of the first decade of the 2000s, as sales of advanced high-margin lamps accelerated. The light bulb industry shipped products valued at $2.62 billion in 2002 and $2.65 billion in 2003. By 2004, sales of the higher-end, specialized bulbs were strong, as consumers recognized that a more expensive purchase meant better performance and longer life over time.

In 2006, electric lamps and parts represented the largest industry product segment at $1.2 billion, electric lighting fixtures generated the second most sales with $951 million, and electric light bulbs were third with $364 million in sales. The industry spent more than $974 million on materials in 2006 while shipping $2.75 billion in goods. The global economic recession, beginning in 2008, along with foreign competition, resulted in a steep decline in industry shipments, which fell to $1.8 billion that year. With general market trends moving toward purchasing for the home, choice in lighting features and performance was an important consideration for manufacturers in this industry, which had generally offered more mundane products in previous years.

Current Conditions

According to Dun and Bradstreet, 344 establishments engaged in manufacturing electric bulbs, tubes, and related light sources (not including LED). Together these firms employed 15,300 people and generated $407.5 million in sales. A majority of businesses were small, with about 75 percent employing fewer than 25 people. Ohio employed the most workers in the industry, followed by Kentucky and Pennsylvania. California was the number one state in terms of revenues, accounting for $88.6 million in 2010.

The use of LED lighting was the most significant trend in the industry in the early 2010s. Although slow to gain ground due to costs, this energy-efficient lighting option looked to be the wave of the future in the industry. Home Depot predicted that sales of LED lights would account for 25 percent of all light bulb sales by 2014. ldquo;By then," said Patrick Martin of the Daily Finance, "light bulb makers hope we'll have adopted LED bulbs as our new favorite light source," although, he conceded, "manufacturers have to overcome a few obstacles before consumers will be ready to make the switch." Some businesses had already adopted the technology. The franchise coffee house Starbucks, for example, installed LED lights in 8,000 of its stores across the nation in 2011. Sales by manufacturers were also showing positive signs. Lighting Science Group of Satellite Beach, Florida, a manufacturer of LEDs, reported a 100 percent increase in year-to-date orders in October 2011 as compared to the same time period a year earlier.

The traditional electric lighting industry, on the other hand, was not so bright, according to a report by IBISWorld. Negative effects came from the influx of imports and increasing environmental and energy regulations. The report predicted that "Operators will increasingly cut costs by consolidating and moving production overseas" and that "They will also attempt to stay competitive by introducing innovative products in line with consumer trends."

Industry Leaders

Industry leaders in the early 2010s included Philips Lighting Co., a subsidiary of the number-one light bulb maker in the world, Royal Philips Electronics, based in Amsterdam, the Netherlands. Annual sales for Philips in 2008 were around $13.5 billion. Philips focused its business on its line of longer-life, higher-margin halogen lamps. By 2010 a subsidiary of Philips, Philips Lumileds Lighting Company, LLC, which was a producer of LED lights, was registering more than $40 million in annual sales.

General Electric's Home and Business division, based in Louisville, Kentucky, was also widely acknowledged as an industry leader. The firm sold about 500 million standard incandescent bulbs and 10 million compact fluorescent bulbs annually. Total sales for General Electric in 2010 were more than $150 billion, although this included revenue from all business segments, as lighting products were not reported separately.

Workforce

Although sales and production volume increased for most industry participants during the 1980s, aggregate employment actually dropped about 12 percent to less than 25,000 in the early 1990s. Manufacturing productivity gains and management restructuring were the primary culprits of recessed employment figures. After registering a brief upswing in the mid-1990s, employment figures spiraled downward to 10,987 in 2003. The number of employees in 2007 was 9,308, and by 2009 that figure was down to 7,719. Of these, about 83 percent were production workers.

America and the World

Besides domestic sales, many manufacturers also were striving to take advantage of growth opportunities overseas. U.S. producers accounted for approximately one-third of global industry sales in the first decade of the 2000s and hoped to further boost their global market share. Although low-cost foreign manufacturers posed significant obstacles to exporters of traditional, commodity-like incandescent bulbs, U.S. manufacturers maintained a decided advantage in markets for high-tech lamps. Thus, U.S. manufacturers were expected to try to fill an open niche market for high-efficiency bulbs in the ripe Asian and European markets. In 2010, the U.S. maintained a trade deficit with imports totaling $2.2 billion and exports just $800 million, according to the International Trade Administration.

Research and Technology

As light bulb producers worked to develop high-tech lamps that could increase their market share and boost profit margins, a steady stream of technological advances greeted consumers in the late twentieth century. Most bulbs offered superior lighting characteristics, greater efficiency, and improved longevity. Other advances made bulbs more environmentally safe for disposal, which was a particularly relevant development in the case of the fluorescent bulbs that contain mercury.

White LED lamps achieved dramatic growth in market share in the early years of the twenty-first century as a replacement for automotive, halogen, incandescent, and fluorescent bulbs. White LEDs were especially attractive for their durability, which at 100,000 hours is 100 times that of standard incandescents. The biggest issue for LED bulbs was the ongoing challenge to developers to increase the brightness capacity while keeping costs under control. Although prices dropped throughout the first decade of the 2000s, by the start of the second decade consumers were still wary of the cost of LEDs, which were much more than the traditional incandescent bulb. Still, LED technology had exploded, and an ongoing stream of new types of lights and applications--for everything from cars and streetlights to homes and offices--flooded the market in the early 2010s.

Light color also was becoming important to consumers. For example, by 2003 General Electric had sold more than 100 million Reveal bulbs only one-and-a-half years after this white incandescent bulb was introduced. Reveal bulbs offered "purer" light than the typical yellowish incandescent light.

One of the most unique innovations at the beginning of the 2000s was the digital light bulb developed by Color Kinetics in Boston. The digital bulb incorporates a tiny chip that allows consumers to generate varying hues through LED bulbs. The digital microchip is programmed by software that allows users to program their light bulbs to perform whatever coloration functions they desire, such as gradually changing the light's color. This development came at a convenient time for the light bulb industry, since it was focused on promoting the decorative qualities of lighting.

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