SIC 3641
ELECTRIC LAMP BULBS AND TUBES



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.

NAICS Code(s)

335110 (Electric Lamp Bulb and Part Manufacturing)

Industry Snapshot

The electric lamp bulbs and tubes industry in the late 1990s was characterized by intensive competition but was also aided by a strong U.S. economy that lead to increased housing starts and a long-awaited resurgence in commercial office building construction. While technological innovations remained the heart of the competitive atmosphere, major manufacturers were focusing ever more heavily 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.

About 53 companies were engaged in the manufacture of electric lamp bulbs and tubes in the late 1990s. They generated shipments of $2.98 billion in 2000, compared to $3.32 billion in 1998. This decline was largely as a result of the increasing presence of foreign competition. The number of employees between 1998 and 2000 fell from 15,946 to 12,768 as firms downsized to streamline costs and boost efficiency. Due to the high maturation of many market segments, manufacturers were looking to boost profits with high-tech lamps and bulbs that could burn longer, brighter, and more efficiently. The implementation of laws prohibiting the continued manufacture of more than 45 electric lamps that don't meet newly established energy standards will certainly create additional changes in the market in the years to come.

Organization and Structure

The light bulb and electric lamp industry provides a practical means of converting electric energy into usable light. In the late 1990s just under one-fourth of all the electricity sold in the United States was 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.

The industry produces thousands of different bulbs, tubes, strobes, and flashes. But the three primary products sold by U.S. electric lamp manufacturers are incandescent, fluorescent, and electric-discharge lights and bulbs.

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 about $1.99 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 consume 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 tend to sell at retail for about $19 to $24. The only drawback of compact fluorescent bulbs is that retailers currently 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—necessary for the operation of neon lamps—which are now smaller than a pack of cigarettes.

Markets. Approximately half of light bulb industry revenues in the late 1990s were derived from sales to individual consumers. State and local governments, including schools, hotels, and hospitals accounted for small percentages of revenues. The remainder of the market was highly fragmented. Motor vehicle manufacturers and electric utilities consumed small portions of total production units.

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. But technological advancements 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 had 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 ten times the light emitted by carbon-filament incandescent lamps. These early bulbs were largely limited to use as heavy-duty street lights, 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. By the early 1950s, though, 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 four 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, in fact, about 60 U.S. producers were shipping $2 billion worth of various electric lamps and were employing more than 22,000 workers. 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 were hoping 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 were focusing 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. Likewise, 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 by 50 percent, resulting in an annual $18.6 billion savings. By mid-1998, consumers were having to pay approximately 9 percent more for their bulbs, in no small part due to the implementation of the act.

Current Conditions

In an effort to maintain a competitive edge in the mature light bulb market, firms were rapidly shifting their attention to the marketing arena in the late 1990s. Manufacturers, aware that most customers purchase bulbs at discount retail stores whose shelves are stocked full of bulbs of all different sorts, wanted to stave off consumer anxiety regarding such an array of choices, which might lead individuals to simply purchase whatever bulb was cheapest rather than scrutinize the intricate variations manufacturers have worked so hard to develop. As a result, creative packaging and marketing has become a primary industry priority. By color-coding similar product lines and advertising lamps with different durations and features from a more utilitarian standpoint, manufacturers enable customers to narrow down their choices and make more informed purchasing decisions. In addition, industry players have 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 together while showcasing and explaining standard wattage variations for regular incandescents as well as the company's more expensive and decorative feature products. Most such in-store displays were fairly costly to ship due to their bulk and fragility; thus, they were placed primarily by the larger manufacturers who maintained the financial leverage to manufacture and ship them. In other efforts, bulbs have increasingly been manufactured to fit the same type of socket across a broad range of product lines, while product-differentiation advertising campaigns have flourished.

Incandescent bulbs remained the anchor of the industry, accounting for about 90 percent of all bulb sales in the late 1990s. But sales of incandescent bulbs remained flat throughout the late 1990s and early 2000s, as sales of advanced high-margin lamps accelerated. Longer-lasting and more costly halogen lamps faced negative publicity in the 1990s, including the revelation that these lamps were 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 toward 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 was expected to cool somewhat in the weaker economy of the early 2000s. Nonetheless, all manufacturers expect that more efficient and longer-lasting compact fluorescent and halogen lamps will take on increasing prominence in the light bulb industry.

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 maintains the federal ban on high-mercury-volume products and standardizes at the federal level a potpourri of often-confusing and conflicting rules enforced at the state level and, as such, should help manufacturers systematize their disposal and recycling procedures. While the ruling reduces the costs to manufacturers for recycling mercury-based lamps, the new classification of these bulbs as "universal waste" demands that they be labeled as such, a development that worries some manufacturers who fear that such labeling will discourage consumers. The EPA estimated that the move would increase the rate at which mercury-filled lamps were recycled to 50 to 70 percent by the early 2000s. In the late 1990s, some 1 billion fluorescent lamps were discarded annually.

Industry Leaders

General Electric Lighting is widely acknowledged as the industry leader, a position it has maintained for years. The firm sells about 500 million standard incandescent bulbs and 10 million compact fluorescent bulbs annually. General Electric commanded an estimated market share of 20 percent in 1999. By the late 1990s, the company was focusing increasingly on its decorative products, heavily marketing its Enrich light bulb line, which features a glass casing designed to filter out some colors to enhance the contrasts between surrounding colors. General Electric does not release financial information on its subsidiaries to the public.

Philips Lighting Company employed more than 6,000 workers in the United States in 1998. Philips focused its business on its line of longer-life, higher margin halogen lamps and generated sales of more than $1 billion.

Osram Sylvania, the Boston-based North American subsidiary of Germany's Osram GmBH, rounds out the big three. In 1998, Osram Sylvania maintained a payroll of 13,000 employees in the United States and Canada and brought in revenues of $1.74 billion.

MagneTek, Inc., an electronics and electrical products firm specializing in lighting, was another industry leader, employing 8,700 workers and posting sales of $678.9 million in 1998.

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 12,768 in 2000. Production workers accounted for 10,790 of this total, earning an average of $18.72 per hour. Falling employment trends are likely to continue well into the next decade.

America and the World

Besides domestic sales, many manufacturers were also striving to take advantage of growth opportunities overseas. Global electric lamp sales were estimated at about $11 billion in 1998 and were expected to increase to about $12 billion by 2001. U.S. producers accounted for just under one-third of global industry sales 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 will try to fill an open niche market for high-efficiency bulbs in the ripe Asian and European markets.

Research and Technology

As light bulb producers labored to develop new, high-tech lamps that could increase their market share and boost profit margins, a steady stream of technological advancements greeted consumers in the mid- and late 1990s. Most bulbs offered superior lighting characteristics, greater efficiency, and improved longevity. Other advances were making bulbs more environmentally safe for disposal; this is a particularly relevant development in the case of fluorescent bulbs, which contain mercury.

White LED (light emitting diode) lamps were expected to achieve dramatic growth in market share in the early 2000s 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 issues preventing LED bulbs from taking over the lighting market, according to analysts, was the continuing challenge to developers to increase the brightness capacity while managing to keep costs under control.

Perhaps the most unique innovation in the late 1990s was the digital light bulb developed by Color Kinetics in Boston. The digital bulb incorporates a tiny chip that enables consumers to generate varying hues through LED bulbs. The digital microchip is programmed by software that allows users to actually program their light bulbs to perform whatever coloration functions they desire, such as gradually changing the light's color over time. This development comes at a convenient time for the light bulb industry, focused as it is on promoting the decorative qualities of lighting.

Further Reading

"Boston-Based Company Has Bright Idea in Digital Light Bulb." Boston Globe, 12 November 1999.

"Consumers Willing to Pay More." MMR, 12 July 1999.

"Hot Product: Softer Halogen Lamps." National Home Center News, 8 March 1999.

"Hot Product: The Bulb Fluorescent Light." National Home Center News, 23 March 1999.

Howell, Debbie. "Diversity Sidelines Soft White." Discount Store News, 5 April 1999.

Johnson, Jim. "New Rules Target Fluorescent Light Bulbs." Waste Management News, 5 July 1998.

"Light Bulbs." MMR, 20 September 1999.

"Lightbulbs." Supermarket News, 17 May 1999.

"Packaging, Merchandising Clarify Choices, Spark Trade-Ups in Lighting." Drug Store News, 1 March 1999.

"Prospects Dim for Hot, Costly Halogens." Wall Street Journal, 10 March 1997.

U.S. Department of Commerce. Bureau of the Census. 1997 Census of Manufacturers. Washington, D.C.: GPO, 19 May 1999.

U.S. Department of Commerce. International Trade Administration. U.S. Industry and Trade Outlook 1999. New York: The McGraw Hill Companies, 1999.

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .



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