An encoder is a device, circuit, transducer, software program, algorithm or person that converts information from one format or code to another, for the purposes of standardization, speed or compressions.
Global consumption of encoder is 12.66 million units in 2018 and is projected to reach 17.841 million units by 2024, at a CAGR of 5.89% during the forecast period
Encoder segmentation by the way of engraving include Rotary Encoder and Linear Encoder, by working principle include Magnetic Encoder, Optical Encoder and Contact Encoder.
For Magnetic Encoder
There are many applications for which the designer must know the position of a shaft relative to a starting point, or relative to its last known position. This is traditionally accomplished in simple applications such as dials or knobs with a linear taper potentiometer; in motor-control systems, multiple Hall-effect sensors or optical encoders are more usual.
These entire device types translate rotation into an electrical signal which can be read, typically by a microcontroller; the position, and often speed, of the shaft may be calculated from the signal. All also share some characteristics which are unhelpful to the system design engineer.
First, they tend to be rather complex, both mechanically and electrically. Further, they are readily impaired by contaminants present in the user’s environment: an optical encoder, for example, might perform perfectly in a clean environment but fail when the code wheel is contaminated by dust and grease. Likewise, potentiometers have a limited useful life because they suffer from wear attributable to mechanical friction.
For Optical Encoder
An optical encoder is an electromechanical device with mechanical input and electrical output. It provides multiple digital signals proportional to angular displacement of the input shaft. Optical encoders are commonly used in motion control systems to control and monitor speed, position, count and direction of components and machinery and equipment where it is installed. Optical encoder operation has no effect on the magnetic field and can be used in both stable, and unstable environments. 
Optical Encoder Market: Key Drivers
Rising adoption of advanced motion control systems, need for more enhanced automation and increasing demand for high quality assurance in surface mount technology (SMT) placement processes are driving growth of the optical encoders market globally. Advanced motion control systems are increasingly being adopted in various sectors, including construction machinery, offshore equipment, military & aerospace equipment, automotive and alternative energy systems. Also, there is growing demand for improved automated controls for industrial applications to improve performance, reduce costs and improve productivity.
Key players in global Encoder market include: Heidenhain, Tamagawa, Nemicon, Pepperl+Fuchs, Omron, Kuebler, Danaher, Koyo, Baumer, TR-Electronic, BEI, Hohner, Yuheng Optics, Leine & linde, Autonics