“Step right up, ladies and gentlemen,” shouts the salesman, “and be among the first to witness the marvelous qualities of these newfangled gadgets. They're guaranteed to last at least 100 times longer and work for almost any application you can imagine!” The salesman reaches out with a flourish and opens his hand to reveal a miniature device only a few millimeters wide, made of tiny semiconductor chips containing gallium nitride (GaN) and a mix of aluminum, indium, gallium, and phosphorus (AllnGaP), all encapsulated in a clear epoxy. “Aw, that's just a stupid LED; we've seen those for years,” someone exclaims with disgust, as the crowd quickly dissipates. “You just wait and see,” says the salesman quietly to himself, now alone. “They might soon surprise you.”

I remember my first glimpse of the personal computer, in 1981, just before I entered the lighting business. At the time, I was freelancing as a programmer on gigantic IBM 360 mainframe computer systems that packed entire rooms. I stood in a crowd of other programmers, managers, and system operators (read: “geeks”) who listened to the entire presentation and then turned away, loudly proclaiming that few people would ever choose to purchase their own computer. “Bah, humbug,” they all said, “they're way too complicated for consumers.” Did I rush right out and purchase 1,000 shares of International Business Machines? Unfortunately, no.

It seems that every few years there is at least one emerging or developing technology that sprouts up at the corner of every LDI aisle and offers a tantalizing, albeit somewhat hazy, glimpse of the future. People stop to try to determine how this up-to-the-minute technology is going to impact their lives. Manufacturers look eagerly for early adopters among the crowd — lighting and fixture designers, end-users, and owners interested in experimenting with the technology even before it has achieved a certain measure of success in our marketplace.

In the case of light-emitting diodes, lamp manufacturers have surely seen the writing on the wall, as Philips, Osram Sylvania, and General Electric have all recently formed partnerships or joint-venture agreements with companies such as LumiLeds, Siemens, and GELCore. Already, the market for high-brightness (HB) LEDs exceeds $1 billion, according to market research firm Strategies Unlimited. As compared to an estimated $12 billion spent each year globally for incandescent, fluorescent, and other types of traditional lamps, however, we have a long way to go before the old-fashioned light bulb is permanently relegated to a shelf in the Smithsonian, I'm afraid.

Still, I noted with interest an announcement in February that LumiLeds has developed a single white LED with an output of 17 lumens, nearly 50% brighter than previous designs. In August, Toshiba debuted a new driver-integrated circuit that boosts efficiency of white LEDs used in certain applications by as much as 85%. According to a source at Agilent, an LED that produces in excess of 1,000 lumens could be less than a decade away, although its initial pricing may well prove an insurmountable barrier to demand, at least at the consumer level.

LEDs have been around since the early 1960s, but it was a breakthrough in 1993 by a Japanese engineer, Shuji Nakamura at Nichia Chemical, that set the stage for the creation of white LEDs. Using a new material, gallium nitride, he was able to create a blue LED with a reasonably high level of efficiency for the first time, a necessity to get to white. Therein lies the true promise for our industry — a light source capable of generating bright, vibrant colors that mix uniformly to white while simultaneously emitting low heat, consuming small amounts of energy, and lasting years longer.

Current programs sponsored by both the Department of Energy in the United States and the Ministry of International Trade and Industry in Japan are evaluating solid-state lighting solutions for the future. Strategies Unlimited has estimated that the HB market will be worth $3.25 billion in 2005 with applications such as display signage, automotive interiors, and signals such as brake lights, mobile handsets, and traffic signals. And that does not include a significant contribution from general or specialty illumination applications, namely us.

Today, there remain numerous barriers to the widespread use of LEDs for our markets, including the adoption of standards for power conversion, control electronics, optics, and housings plus concerns about high initial costs, reliability, and efficiency as measured against more traditional alternatives. Despite these limitations, both theatrical and architectural fixture manufacturers have already begun to embrace LED technology and odds are it's only going to get better with each passing year. The question to be asked is when will the technology truly become viable and who will lead it there?

Peter Lynch, former manager of Fidelity Investments' Magellan mutual fund, said that one of the best places to look for stocks is within your own backyard, so to speak. Given that the LED market may eventually encompass nearly every residential and commercial customer on the planet, I'm going to keep on reading those press releases and attending those trade shows.

While researching this column, the author even discovered a website detailing how to upgrade his model train with white LED headlights!