Optical Goods

INDUSTRIAL CODES

NAICS: 33-3314 Optical Instrument and Lens Manufacturing, 33-9115 Ophthalmic Goods Manufacturing

SIC: 3827 Optical Instruments and Lenses, 3851 Ophthalmic Goods

NAICS-Based Product Codes: 33-33141, 33-33143, 33-3314W, 33-91151, 33-91153, 33-91157, 33-9115B, and 33-9115W

PRODUCT OVERVIEW

Fundamental Physics

The core component of any optical device is a lens that changes the direction of rays of light. Positive lenses that resemble parentheses face to face—()—cause rays of light to converge to a focus. Negative lenses—)(—cause rays to diffuse, to spread apart. This comes about because light slows as it passes through a dense but translucent medium, like glass or plastic and, in slowing, a ray will refract or bend. This behavior of light is exploited by optical instruments for all kinds of purposes, which makes optical goods so useful and so widely applied.

Light, of course, is just one type of radiating energy, part of the electromagnetic spectrum. The entire spectrum begins with extremely energetic waves of radiation known as gamma-rays. Next in order are X-rays, ultraviolet light, our own visible light, infra-red light, microwaves, radio and television waves, and finally so-called long-waves. All of these types of radiating energy are propagated in a straight line in a wave form; they have peaks and valleys. The distance between two peaks is known as the wave-length. The number of wave-peaks that pass a single point in space in one second is called the wave's frequency. The two measures are related because all waves travel at the same speed; the speed of light. A high frequency, therefore, many waves per second, necessarily implies a short wavelength. In this realm of physical reality numbers tend to be astronomically large or small. Gamma-rays, for instance, the most energetic, have frequencies in the vicinity of 10¹⁹ Hertz (Hz). This number is greater than a quadrillion, or 1,000 trillion—that many wave-peaks pass in one second. The wavelengths of gamma-rays are unimaginably small, between 10⁻¹¹ to 10⁻¹⁴ meters, thus falling in the range just shy of a trillionth of a meter at their biggest and just shy of a quadrillionth of a meter at their smallest. Visible light has considerably greater wavelengths, the number for violet, ranging from 400 billionths of a meter, called a nanometer (nm), to 700nm, the wavelength for red light. The frequency of visible light is in the 10¹⁵ Hz area, thus around a quadrillion Hz. Infrared, microwave, radio and television, and long-waves have greater wavelengths and lower frequencies.

This look at the entire spectrum is useful because all of these waves can be bent or refracted by lenses of the right design. Positive (concave) lenses can concentrate them and negative (convex) lenses can diffuse them. Using a series of lenses in combination can deliver all kinds of results, thus they can make very tiny objects appear visible, bring very distant objects nearer, can concentrate radio or television waves, and can also focus light into extremely tiny beams for reading CD disks or inscribing images on drums in laser printers. The rays so managed, further-more, need not be visible light, but may come from other ranges of the electromagnetic spectrum.

Major Functions

Our ability to bend rays of light and to control their angles of refraction by shaping lenses opens the way to magnifying the small and bringing the distant close. Magnification can be understood best by considering mirrors. When looking in a mirror, our face appears to be in a space behind the mirror rather than on its surface. Light is bouncing off the mirror's surface, to be sure, but we see depth. When we look at very small print through a magnifying glass, something analogous happens. We see the print behind the magnifying glass, but this time not as it appears—the tiny print is large. Rays coming from the print change angles as they pass through the lens. Our eyes project this light as if it were not bent; our eyes are influenced only by the angles of the light on our side, not on the far side of the glass. We form an image out of these angles and see the targeted object as if it were behind the glass. Optics calls that which we see a virtual image. Our brains create it by interpreting the light. The word virtual is used because these images cannot be photographed.

When we allow the light from the lens to reach a photosensitive surface in a camera, be it film or a digital sensor, we obtain an actual rather than a virtual image and therefore can record it. As a consequence of the lens's action, the image will always be reduced in size. The same angles of light our brains project forward when looking at a magnifying glass are actually converging. We see the image magnified, but it is actually being reduced. Thus optics enable us to concentrate light and other rays. We use this convergence to concentrate radio and TV rays for transmission by antenna.

Telescopes make use of both functionalities by using two lenses. The main lens concentrates light to a sharp focal point inside the telescope. The eyepiece, another lens, is used to magnify that focal point, helped by our own perceptions as discussed above. In looking at the moon through a telescope, the telescope first compresses light reflected from the moon to a tiny focus which, enlarged by the eyepiece, appears much larger than the moon looks to our naked eyes. Telescopes work because they are able to collect much more light from an object, and thus capture much more detail, than the human eye. The human pupil has a diameter of around 4 mm (one-sixteenth of an inch). Galileo's first telescope had a diameter of around 5 cm and thus collected twelve times as much light. Microscopes work in the same way as telescopes.

We can design lenses so that they permit only rays moving in parallel to pass. These collimating lenses are important in laser technology. Lasers, in turn, are prominent in consumer products like compact disks (lasers write and read them), in printers, and in optical lithography used to make integrated circuits. We also use collimating lenses in conjunction with prisms (the latter shaped like the Greek delta, Δ) in spectroscopy. Spectroscopes split light into its component rays of different colors. Precise management of light using optical methods is at the foundation of industrial and scientific measurement technology, called metrology.

A Look Back

The first use and production of glass arose in Mesopotamia. The first glass beads used for decoration date back to 2600 BC, the time of the Sumerians. Molded glass containers have been dated to the time of the Egyptians and the year 1540 BC. Glass blowing was discovered in Babylon, just south of today's Baghdad. The art then spread rapidly into the Roman Empire and the days of Augustus (63 BC to 14 AD). Melting sand into glass using various added chemicals was practiced by then with ingredients added to produce desired colors, including manganese to create purple. A low amount of manganese would produce clear glass, although the dose to be used to get consistently clear glass was not discovered until 100 AD in Alexandria, quickly leading to the making of glass for windows used by the very rich. Glass was a luxury product then. Some clear glass must have been produced even earlier, and with the right curvature, because Lucius Annaeus Seneca, the famed Seneca the Younger, reportedly used a water-filled glass sphere to help him read in his old age.

The number of readers in those days was not large enough to lead to eyeglasses. That awaited the passage of another 1,200 years. In the meantime the Roman Empire fell and another civilization arose. Glass production fell into dormancy during the transition. In the 1200s, however, so-called hand-sized read stones appeared for general use produced by glass blowers in Italy. The basic principle behind this magnification was noted by Roger Bacon in 1268. Bacon recognized that a partial glass sphere, with the bulging, thus concave, side of the glass pointed at text, would do the job. By the 1280s the first spectacles had appeared. They were twin lenses set in frames and suspended over the nose by a connecting link. The art of making lenses advanced slowly after that, creating a profession of spectacle makers. Holland became prominent in this specialization so that Dutch spectacle makers discovered instruments to see both the tiniest and the greatest and most distant objects. In 1590 Zaccharias Jansen invented the first microscope, and in 1609 Hans Lippershey invented the first telescope. Historians are not quite sure that Lippershey was the only inventor of the category; others may have hit upon the idea at the same time. All historians, however, name Lippershey as the first. Galileo Galilei in Italy made his own telescope soon after 1609. Using it, he discovered that Jupiter had moons.

The field of scientific optics gradually emerged from these beginnings. The usefulness of microscopes in science and telescopes in astronomy, seafaring, and war stimulated development of ever better lenses. These lenses, in turn, helped the scientific study of light progress so that physics and lens technology advanced side by side, each assisting the success of the other. Some 1,400 years after the telescope's invention, thus in the latter part of the first decade of the twenty-first century, optical devices incorporating lenses had become deeply embedded in our technological culture. Glass continued dominant in industrial applications but had come to share the lens market with plastics, and reading stones had morphed into tiny plastic contact lenses.

Major Product Categories

Optical goods are typically classed by basic end-uses, but the ubiquitous presence of optical devices across the board in industrial, military, research, and consumer categories makes any categorization approximate. Large groupings include ophthalmic goods, camera lenses, and optical instruments.

Ophthalmic Goods

This is the category of corrective lenses, sometimes called prophylactic devices. Ordinary prescription eyeglasses, with single, multi-focal, and progressive lenses are one category, contact lenses the other. The first are framed for easy wear. Contact lenses have secondary cleaning solution markets. Bifocals are a common multi-focal lens; they provide two focuses, one for reading and one for distance, for example. Progressive lenses are designed to provide graduated magnification. By moving his or her head the user finds the right focus for a target. No visible transitions are discernible by looking at the glass itself. Sunglasses, protective goggles, welding circles and plates, and similar devices intended for people are included in the category and generally referred to as ophthalmic goods, the word derived from the Greek for eyes.

Camera Lenses

Used in still or motion picture photography, these lenses are designed to produce images on film or digital sensors and are designed for standard or special uses. They come in standard, telephoto, and wide-angle varieties. Zoom lenses permit the user to switch from one style to the other by adjustment. In industrial classification camera lenses are included with optical instruments, next on the list.

Optical Instruments

The products in this category extend from small opera glasses to large telescopes made of many curved mirrors arranged in the countryside. Ordinary and electron microscopes are used in research and medicine. Theodolites are used in surveying, and borescopes for investigating inaccessible areas. The lens of a borescope is at the end of a tube and the visual image is transmitted to the user by optical fibers. Miniaturized versions of this technique are used in medicine. Metallographs are specialized microscopes for inspecting and also photographing metal surfaces. Contour projectors are used to measure fabricated components. Interferometers, as their name implies, cause two or more waves to overlay and thus to interfere with one another. Interferometers are used in astronomy, measurement, oceanography, seismology, and other activities. Metrological devices are included here. While some of the instruments above are on a very high level of sophistication, ordinary magnifying glasses and binoculars are also in this category of optical goods.

Other Product Categories

Additional groupings of the optical goods category are common and widely used in industry and distribution. The three most often mentioned subcategories are the following:

Military Devices

As an industrial category, military devices are carried under optical instruments in that, indeed, they are instruments. They are sighting, tracking, and fire-control devices. Periscopes belong in this category as does night vision equipment. The military as well as the civilian population uses binoculars. Optical gun sights are used both by military forces and by hunters.

Medical Devices

Optical instruments used in medicine are grouped together into a single market category. That grouping may include microscopes but many also include other devices used for diagnostic purposes, including eye-examination equipment; surgical aids to magnify very small areas; uses of lasers in dental, eye, and other interventions; and endoscopes to look into the body.

Industrial Process Devices

Optical products employed in the manufacturing process as well as optical components built into products belong into this class. Optics are very widely used in electronics, not least in making the most basic product of that field, the semiconductor chip. Chips are tiny objects produced using optical lithography, one reason why chips are called printed circuits. They are literally printed by devices based on lens technology that reduce already minute masks to even smaller dimensions. Reduced and projected patterns in the masks are then recorded on the surface of silicon wafers coated with photosensitive deposits by laser light. The lasers themselves, in this application as in others, operate by lenses. The application of optics to electronics is called optronics, and the field is of great diversity. Laser printers, CD devices, television sets, radios, cell phones, and many other electronic goods operate using optronics products. ThomasNet, a Web site of Thomas Register, lists some sixty-nine major lens applications categories, most of which are used in industrial processes.

This brief summary gives a glimpse of the panoramic extent of optical goods in use. Virtually every product branches into subcategories and most of those have branches of their own. For example, interferometers have four major categories which subdivide into more than forty technologies. Special endoscopes are used in arthros-copy (joints), bronchoscopy (respiratory tract), colonoscopy and proctosigmoidoscopy (colon), colposcopy (cervix), cholangioscopy (bile duct), cystoscopy (urinary tract), esophagogastroduodenoscopy (gastrointestinal tract), Falloscopy (Fallopian tubes), fetoscopy (fetus), laparoscopy (abdominal/pelvic cavity), rhinoscopy (nose), and thoarascopy and mediastinoscopy (chest). For cataract surgery six different devices are available. Lists of this sort viscerally communicate the field's complexity, especially when we consider that the same profusion of products categorizes virtually every category of optical goods.

MARKET

The three most clearly visible segments of the optical goods category are ophthalmic goods, instruments and lenses, and cameras. Of these, ophthalmic goods represent the largest segment and cameras the smallest, as shown in Figure 158.

Note that the segments shown depict shipments. Particularly in this grouping of industries, data at the manufacturing level do not provide an accurate picture of consumption by retail or institutional buyers because exports and imports skew the picture. Imports satisfy approximately 70 percent of all demand for cameras in the United States and exports are virtually invisible if they take place at all; cameras, for example, have a much larger share of the optical goods market at retail than they have at the production level domestically. The optical instruments/lens industry exports a high proportion of its manufactured goods, 37 percent of shipments, but it also imports at high levels albeit imports are lower than exports. This suggests that the segment is somewhat smaller at the retail level than in manufacturing. In the ophthalmic goods industry exports take around 12 percent of domestic shipments. Imports are not well reported. The market shares of leading eyeglass producers, who are foreign, suggest that imports play a large role in the industry. These exporters to the United States, however, operate large numbers of so-called laboratories in the country with domestic laboratories accounting for much of the value added to imported lenses. On balance, therefore, it would appear that at retail the ophthalmic goods industry is somewhat larger than it is at the manufacturing level. The shift from glasses to contacts also has a bearing.

A history of shipments from 1997 to 2005 is presented in Figure 159. These data show an industry with shipments of $6.8 billion in 1997 growing to $9.1 billion by 2005. Ophthalmic goods and cameras account for the growth in this period, increasing at 5.1 percent and 19.9 percent, respectively, every year. Growth in optical instruments and lenses has been essentially flat, although shipments rose somewhat in the late 1990s and then weakened in the brief recession that began late in 2000 and ended in 2001. The total optical goods category had an annual growth rate of 3.7 percent, below that of Gross Domestic Product (GDP) at 5.1 percent per year but better than the durable goods portion of the GDP, which advanced at 2.3 percent per year.

A closer look at major segments shows some of the dynamics underlying growth trends. Information on product detail is somewhat limited. Data are available uniformly only for 1997 and 2002, years for which the U.S. Census Bureau conducts a full survey. In other years the Census Bureau's Annual Survey of Manufactures uses partial surveys only and only reports aggregates.

Ophthalmic Goods

The largest segment of this industry in 2002 was contact lenses, accounting for 47.8 percent of shipments. The segment also exhibited the most rapid growth 1997 to 2002, increasing output at the rate of 6.8 percent per year. Most of the lenses sold (98%) were soft lenses. The growth represents a shift away from conventional glasses, with obvious consequences for the industry's glass-frames segment. That segment, 1.7 percent of total shipments, down from 2.9 percent in 1997, showed a decline of 6.1 percent per year. Conventional focal lenses made of glass or plastic were 13.9 percent of shipments, down from 21.9 percent in 1997, losing ground between 1997 and 2002 at the rate of 5.3 percent per year. Lenses made of plastics represented 89 percent of this category and were losing ground at a lower rate (4.6% per year), lenses made of glass were 11 percent of this category and losing sales faster (9.6% per year). The remaining products, accounting for 36.6 percent of shipments, were industrial eye protection products; sunglasses, including anti-glare types; specially made ground glass prescription glasses; and other products the Census Bureau was unable to assign to other categories.

Among three U.S. companies, Bausch & Lomb, is both the dominant domestic and world producer. With this segment's sales dominated by contact lenses and all other kinds slowly declining, it would appear that the ophthalmic goods industry is importing less and less of its product.

The major driving force here is an aging population. Changes in demographic structure between the last two census years, 1990 and 2000, tell the story. If we divide the population into twenty age groups, each representing a five-year span, we see that increases have come from those aged 50-54 (up 54.9%), 45-49 (up 44.8%), and 90-94 (up 44.6%). Among all twenty age groups, nine of the older groups had higher growth rates than the four groups 19 and younger. Those in the prime of life, 20-34 had dropped in number. The trend has not reversed, but has intensified since 2000. Census Bureau projections to the year 2010 show that the biggest increases will be in the age group 45 to 64, expected to grow 26.5 percent between 2000 and 2010—the people who begin to use glasses of standard magnification and then transition to prescription lenses.

Optical Instruments and Lenses

Although the product proliferation in this segment is greater than in the other two major industries, detail on products is virtually unavailable. The Census Bureau provides three breakdowns only. The first is principally military instruments, such as Sighting, Tracking, and Fire-Control Equipment, which accounted for 21.5 percent of shipments in 2002; the second is All Other Miscellaneous Instruments and Lenses, which was 72.2 percent of shipments; and the third is Optical Instruments and Lenses, not specified by kind (nsk), which was 6.2 percent of shipments. The Census Bureau subdivides the All Other category into binoculars and astronomical instruments (4.5% of the subcategory), other instruments and lenses (95%), and another all other, nsk category (0.5%). Both the industry's largest segment and its own largest subdivision are left undefined.

The industry's product shipments in this period from 1997 to 2002 grew at a rate of 0.8 percent annually—and had virtually no growth in the 1997–2005 period. The two products showing growth at the 1 percent per year boundary or higher, measured from 1997 to 2002, were military products, advancing at 1.2 percent and binoculars and astronomical instruments at 9.8 percent per year. One infers from these statistics that the industry is both mature and very competitive. The Census Bureau identifies 423 companies as participants. One likely explanation for little or no growth is the gradual displacement of electronics manufacturing, principally to Asia. This in part accounts for high rates of exports of this industry's products, which may also be mirrored by the start-up of optic instrument production overseas.

Cameras

In the 1997–2005 period the camera industry was undergoing a dramatic transition between traditional film cameras, also referred to as analog cameras, and the new digital cameras that substitute electronic sensors for film and magnetic media to store pictures already taken. Most of this industry was supplied from overseas, principally from Japan, but domestic production of cameras, growing at nearly 20 percent per year, has made cameras the most rapidly growing category in the optical goods industry. Sales of analog cameras have been dropping sharply with the exception of the highest end advanced photographic systems. Digital camera sales have all but taken over the consumer market. Unit sales rose from a level of 4.5 million in 2000 to 20.5 million in 2005, more rapidly even than dollar sales. Camera prices have been dropping.

Domestic production is divided roughly equally between still cameras and motion picture cameras, the former growing rapidly and the latter declining sharply as imports are displacing domestic manufactures. In the still camera category, the most growth has been shown in the higher-end models that deliver greater picture resolution.

The principal driving force behind the favorable performance of cameras is attributable to the spread of personal computers, the Internet, color photo printers, and dropping camera prices.

Bottom Line

To sum up the market picture, optical goods represent a $10 billion dollar industry at the manufacturing level with reasonable growth, better than that of comparable durable goods. The industrial segments are flat, principally because the industry is mature. Growth is ensured by an aging population and helped on the margin by the still actively growing digital equipment sector.

KEY PRODUCERS/MANUFACTURERS

The leading manufacturer of contact lenses is Bausch & Lomb Incorporated, a U.S. company with sales in 2006 of $2.29 billion. Approximately 31 percent of the company's sales come from contact lenses and another 18 percent from products sold to care for the lenses. Bausch & Lomb is also a participant in eye surgery equipment. Other important participants are Johnson & Johnson, which sells the ACUVUE brand of contact lenses, and The Cooper Companies, Inc. Cooper is third-ranked in contact lenses and also sells surgical equipment. Alcon, Inc., a Swiss company, is a leader in ophthalmic surgery equipment. STAAR Surgical Company, based in California, is a producer of implantable lenses for eye correction.

A world leader in the production of eyeglasses is Essilor International. This French company had sales of €2.7 billion in 2006. Essilor claims to have 23 percent of the world's business, producing 195 million eyeglass lenses annually. The company was a pioneer in developing progressive lenses and estimates that it sells one of every two produced and one of every three other types of lenses. There are a number of more specialized eyeglass producers. Following is a listing and brief description of key producers: Hoya Corporation (Japan) is a specialist in plastic lenses. Indo Internacional SA (Spain) produces, in addition to lenses and eyeglasses, eye examination equipment for the ophthalmologist. Nikon Corporation (Japan) is a leader in cameras but also produces eyeglasses and lenses. Pentax Corporation (Japan), best known for its camera products, is also a producer of surgical loupes and endoscopes; surgical loupes are twin magnifiers mounted on a pair of glasses. Rodenstock Gmbh (Germany) offers specialized glasses for pilots and participants in all kinds of sports alongside a line of high quality eyewear. Seiko Optical Products Company, Ltd. (Japan) specializes in plastic lenses. Carl Zeiss AG (Germany) participates in the eyeglass market through Sola, originally Australian but transplanted to the United States, through American Optical, and by producing a special Teflon-based protective coating for lenses. Zeiss is a major factor in lenses generally, active in cameras, optical instruments, and tooling of all kinds.

The two leading producers of cameras in the world are Canon Inc. and Sony Corporation. The leading U.S. producer is Eastman Kodak. Among world leaders in this product category are fifteen Japanese companies (Canon, Casio, Fuji, Kyocera, Minolta, Nikon, Olympus, Panasonic, Pentax, Ricoh, Sanyo, Sharp, Sigma, Sony, and Toshiba), five German companies (Leica, Linhof, Minox, Rollei, and Zeiss), two Swiss companies (Alpa of Switzerland and Sinar AG), and one each in Sweden (Victor Hasselblad AB) and in South Korea (Samsung Corporation).

In the much more diversified market for optical instruments, companies representative of sectors within that broad industry are Olympus Corporation, Mead Instruments, Warren-Knight, and Reynard Corporation. Olympus Corporation is a Japanese firm founded in 1919. The company had worldwide sales of $8.5 billion in 2006 with 23 percent of its sales in North America. Olympus originated as a microscope producer and is a leader in that market, making products for both industrial and medical/research applications. In addition to microscopes, Olympus makes surgical tools and diagnostic systems.

Mead Instruments Corporation is a leader in consumer optics. It makes and distributes telescopes, binoculars, microscopes, and rifle sights for hunters and sharpshooters. The company had sales in 2006 of $101 million. Its chief competitor is SW Technology Corporation, owner of the Celestron brand of telescopes. SW Technology is an element of Taiwan-based Synta Technology.

Warren-Knight Instrument Company, based in Philadelphia, is representative of companies that produce optical goods for industrial and military applications. This privately-held corporation is a major defense contractor with a line of military and navigation equipment but also sells surveying devices, telescopes, and a wide array of optical tooling to industry.

Reynard Corporation, of San Clemente, California, is a supplier of what it labels military optics to major aerospace companies and defense contractors. The latter, in turn, incorporate Reynard's components, coatings, and other systems into products that become military goods.

MATERIALS & SUPPLY CHAIN LOGISTICS

The largest inputs for the optical instrument industry are lenses followed by printed circuits, other electronic components, and fabricated metal products. In the camera industry lenses play but a small role as measured in dollars; large inputs are electronics components and fabricated metal products of a sophisticated and therefore expensive kind. In the ophthalmic products industry lens blanks and plastics are the two largest materials input categories.

Sand appropriate for making glass must be low in iron, chromium, and cobalt content and high in silica; the former give glass a color but, gives particularly for optical glass, clear glass is desired. Suitable sands are not uniformly available but common enough everywhere. The high value of lenses versus the raw material from which they are made means that lens manufacturing need not be and is not located where the sand is found. Producers of glass containers and window glass, products produced in mass, tend to locate close to appropriate sand deposits to minimize transportation costs associated with raw materials.

All optical goods are produced in economies of high technological development, which are also the largest consumers of these goods. Optical goods are characterized by high levels of value added in manufacturing (VA), thus the increase in dollar value over the cost of purchased materials. In the United States, in 2002, value added was 48.2 percent of total shipments for all manufactured goods. In the optical goods sectors considered as a group, value added was 60.7 percent of shipments, thus significantly higher than the manufacturing average. Camera VA fell below the average slightly, at 47 percent of shipments, but optical instruments had VA of 62.7 and ophthalmic goods VA of 65.1 percent of shipments. This suggests that locational factors influencing logistics are relatively unimportant in the industry.

DISTRIBUTION CHANNEL

Optical goods follow quite diverse channels of distribution depending on the final product. Cameras are sold through distributors and retailers; retailers may be general purpose mass merchandisers or specialized camera dealers. Consumer optics, such as telescopes and binoculars, have a similar distribution system. Optical instruments used by the military are acquired by competitive procurement; the prime contractor, typically an aerospace or defense company, will purchase components from other specialized suppliers directly or through wholesale distributors. Industrial and other buyers use specialized distributors.

Ophthalmic goods in part follow a unique distribution system dictated by the need to fill prescriptions. Producers use a wholesale distribution system in which the participants form a hybrid between producer and distributor. They are called laboratories in the business and engage in preparing lenses, as prescribed by the ophthalmologist, for final distribution by the optical store. A segment of all ophthalmic products consists of eyeglasses with standard magnification sold in retail outlets, typically drug stores, to those people whose eyesight is beginning to require help. These products follow the more conventional distributor-retailer-customer channel.

KEY USERS

The most important user group—because its members need the product to function properly—are people who wear eyeglasses or contact lenses. These may also be the largest user group of optical products. The Centers for Disease Control and Prevention puts the number of people over 40 with visual impairment at 9 million. In the 2000 Census of the Population people with such impairment aged 65 and over numbered some 35 million. The key users fall between these ages, in that the 9 million figure includes medically diagnosed cases whereas the 35 million number includes the elderly, many of whom use glasses even if only for reading.

Camera owners form another very large user group. With camera sales running around 20 million units yearly (2005), this group may well equal users of eyeglasses—although, of course, the groups overlap. At the retail level digital camera sales alone were around $6.2 billion and corresponding retail sales of optical goods stores were running around $6.7 billion, suggesting that on a dollar basis the two industries were approximately the same size.

The three largest institutional user groups were medicine, the electronics industry, and the military. The use of optical goods, however, is so widespread that the term key user, if divorced from the concept of market size, would fit just about everyone requiring photographic images or magnification.

ADJACENT MARKETS

Photographic and X-ray devices involve the use of film and/or paper to record images, thus representing a couple of adjacent markets. Digital cameras that do not use film require magnetic media to hold the images and photo printers to produce snapshots to hold in the hand or to paste into albums—two additional adjacent markets. Projection equipment used either in the home, in business, or as industrial measurement tools—such as contour projectors—require a display screen. Physicians use backlit display panels to examine X-rays. Camera cases, tripods, timing devices, and special filters are closely adjacent markets to cameras and telescopes.

Eyeglass cases and contact lens cleaners also represent adjacent markets. Contact lens solutions and tissues form a market at least one-third as large as the contact lens production taken by itself.

Many optical devices are components of larger assemblies in which they perform functions. They are present in CD players, laser printers, television sets, sporting and hunting rifles, and even in automobiles. Headlights and taillights make use of optical designs. In most of these categories the products' own adjacent markets are in part associated with the optical goods in the products, thus music for CDs, toner and paper for printers, and so on.

Just a few products are adjacent to optical devices in the sense of providing services that compete with them. Novels and magazines printed in large font sizes are aimed at readers who want to avoid glasses. Audio books replace vision with sound. Other products include outdoor thermometers designed to display temperature prominently from a distance and medical thermometers with large digital readouts. Aside from such convenience products aimed at the elderly, no genuine alternatives to traditional optical approaches exist.

RESEARCH & DEVELOPMENT

The range of R&D activity associated with optical goods is enormous. Briefly, R&D is specialized by applications categories, thus in medicine, military application, astronomy, materials science, electronics/optronics, and industrial measurement categories. Basic thrusts of research are discernible. These include miniaturization of components, the replacement of analog with digital signals, and computer-assisted imaging of data acquired by sensors. An example is provided by endoscopes used in medical diagnosis. The ultimate aim in the field is the development of capsule endoscopes, extremely tiny devices that can move into the body and find their way to organs on their own without tubes of any kind. Equipped with minute sources of illumination, tiny lenses, artificial intelligence, and broadcasting power, the capsules could look inside kidneys, livers, and other organs and send back a stream of data that imaging equipment could turn into pictures. Such devices are still only in the development stages but illustrate the major thrusts of research. An important line of research in lens technology is the development of very thin coatings that can be formed to act as lenses and reflectors in devices or cells of minute size.

CURRENT TRENDS

Aside from trends in research and development, the most important positive trend is the aging of the U.S. population, thus the relative numerical increase of people in age cohorts 40-years and older. This demographic trend influences countless sectors of the economy and optical goods especially, because members of these cohorts use ophthalmic goods. The rapid growth of the camera market may be viewed as a temporary phenomenon caused by the shift from film-based analog to circuit-based digital photography. This has made photo-taking and display easier. The Internet has added the ability to share pictures rapidly across great distances with family members. Inkjet printers have made it easy to produce very good snapshots on shiny paper right at home. This wave, as it might be pictured, is expected to flatten again by the second decade of the twenty-first century as this sector, much like the market for analog cameras, also matures.

The globalization of manufacturing is viewed by many as a negative phenomenon in that domestic jobs are transferred to countries with lower-cost labor. In the optical goods sector this development is brought into prominence by the loss of most electronic products manufacturing, principally to Asian countries. U.S.-based manufacturing still predominates in ophthalmic goods because American companies dominate the largest sector, the contact lens sector. The camera market is already dominated by foreign producers. Producers of optical instruments seem least influenced by the general exodus, possibly because these are not mass-produced consumer goods but very high-margin products requiring proprietary technology. The no-growth performance of this sector, however, testifies to the shrinking industrial market to which at least a portion of this sector's goods are sold. Its medical and military markets are sustaining the sales of this sector, but eroding industrial markets are robbing it of growth.

TARGET MARKETS & SEGMENTATION

Ophthalmic markets are segmented into contact lens eye correction and eyeglasses, and the latter further segmented into plastic and glass lenses. Contacts are dominant because they do not obstruct the face. Plastics are promoted because they are lighter; glass lenses because they are clearer and do not scratch.

Camera sales cluster strongly at two extremes, low-cost products for casual picture taking and high-end cameras for the dedicated amateur and the professional. Professionals continue to maintain a market for advanced analog photo systems which still provide performance measurably superior to digital devices. The mid-level of cameras are sold to amateur photographers who cannot as yet afford the priciest goods but want something better than the casual user.

Beyond these major categories are products targeted at very narrow and specialist categories. In these markets for instruments used in industry, research, medicine, and the military, performance is the chief selling point. Sales are handled by engineers. Cost-benefit considerations are secondary to technical specifications.

RELATED ASSOCIATIONS & ORGANIZATIONS

American Academy of Ophthalmology, http://www.aao.org

Contact Lens Association of Ophthalmologists, http://www.clao.org

Optical Society of America, http://www.osa.org

Optical Storage Technology Association, http://www.osta.org

Vision Council of America, http://www.visionsite.org

BIBLIOGRAPHY

Carboni, Giorgio. "From Lenses to Optical Instruments." Fun Science Gallery. Available from 〈http://www.funsci.com/fun3_en/lens/lens.htm〉.

Darnay, Arsen J. and Joyce P. Simkin. Manufacturing & Distribution USA, 4th ed. Thomson Gale, 2006.

"The Discovery of Glass." Glass Online. Artech Publishing S.r.l. Available from 〈http://www.glassonline.com/infoserv/history.html〉.

Gilman, Victoria. "Glass." Chemical & Engineering News. 24 November 2003.

Lazich, Robert S. Market Share Reporter 2006. Thomson Gale. 2006.

"Lenses." ThomasNet, Thomas Register. Available from 〈http://www.thomasnet.com/products/optical-lenses-43871409-1.html〉.

"The NDP Group Focuses on Digital Camera Forecast Through 2010." The NDP Group, Inc. Press Release, 6 March 2006. Available from 〈http://www.npd.com/press/releases/press_060306.htm〉.

"PMA Monthly Printing and Camera Trends Report." Photo-marketing Association International. Press Release, 7 June 2007. Available from 〈http://www.pmai.org〉.

"Reading Stones—The First Lenses to Improve Eyesight." EyeTopics. 15 December 2004. Available from 〈http://www.eyetopics.com/articles/41/1/The-History-of-Eyeglasses.html〉.

Wilson, Andrew. "IR Lenses maximize detector potential." Vision Systems Design. May 2005.

see also Cameras