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Front Projection Seeks Performance, Price Balance: Quixel

9/08/2011 12:01:00 AM Eastern
INDIANAPOLIS — At this week’s CEDIA Expo dealers and installers will be presented with a range of front projection (FT PJ) products positioned to follow to seemingly conflicting market trends — steady advances in technology and performance and rapidly declining entry and mid-range price points.

Tamaryn Pratt, Quixel Research principal, said, “The entry and lower of the market has been fueling the overall front-projection category in the past several years. Is has been both painful and a blessing. The aspirational customer is looking for value, and now there are many great options in the $2,500 to $5,000 and under price range.”

She said that while many custom dealers have steered away from projects that small, “economic realities make it necessary, and honestly, there are fantastic options as the performances from manufacturers like Epson, Optoma and Mitsubishi have increased.”

Manufacturers that stay in the ultra-high-end FT PJ segments “are widening their portfolios to reach those consumers — a great example is Runco’s LS-1 with a $3,995 MSRP,” she pointed out.

The $5,000-and-higher segments will see growth in 2011 and account for about 5 percent of the market in units and almost 40 percent of the market value, she predicted.

“Compared to the $2,000-and-under segments, revenue share will increase from 40 percent to 43 percent and volume from 78 percent to 85 percent,” Pratt said.

Market drivers are greater performance levels for the price “and 3D is a big factor for the value increase in both the low and high end of the FT PJ market.”

Both Epson and Optoma, leaders in the entry and entry-step segments, will have several models less than $2,000 that include the 3D feature.

“They can charge a small premium. It helps the economic for everyone in the chain,” she said.

Pratt said 3D is slowly becoming a significant factor in the growth for the FT PJ segment.

“We know the ratio of 3D glasses sold with FT PJs is higher than expected, and the percentage of sales is becoming significant or almost 45 percent of the products sold over $5,000 in 2011 were 3D-capable. At CEDIA 2013, there will be few if any projectors that are not 3D capable,” Pratt predicted. “Of any display, this is the one that makes sense for 3D. It is immersive and communal.”

As for the active vs. passive 3D glasses debate, Pratt said that in FT PJ, “active has the strong hold, especially under $10,000. However, it is an interesting pitch to link the passive glasses to the cinema experience.”

Quixel is forecasting the overall FT PJ market to grow 6 percent to 163,388 units in 2012. That number includes the lower-resolution models (DVD/combo) and if mass retailers decide that the segment is no longer important for their customers, we will see sales decline precipitously.”

As for new PJ technologies, “LED projectors have not been a huge factor yet,” Pratt said. “Part of that has to do with the economy, as well as the economics of designing and building new products for a niche market. However LED will be a factor.”

Quixel reported that through the first half of 2011 only 11 percent of the $5,000 and under market was made up of LED projectors but over 60 percent of the $10,000 and over models were LED.

“A lot of this delta is about pricing, and new lowerpriced models are just now coming into the market whereas pre economic decline, most manufacturers were showing future model lineups with a broad LED offering,” said Pratt. “On the dealer side, it is safe to say that FT PJ consumers dislike bulbs, or any kind of ongoing maintenance if they can avoid it. So that is a big plus. Dealers also like the color performance, instant-on and the energy efficiency.”

As for top-performing home-theater projector brands, Pratt said Epson is the key driver in the sub- $2,500 segment, leading share overall and gaining overall in the less-than-$5,000 segments where many CEDIA dealers have embraced them.

“JVC is the market leader in the $5,000 to $10,000 range, and they have had recent successful moving upstream with their DLA-RS60U/DLA-X9 models,” Pratt said.

At the same time, Sim2, DPI and Runco in the ultrahigh end have made significant inroads, increasing their breadth downstream, and are adding even more new models this year and next.

“This opens up the risk of diluting a high-end brand, really,” Pratt said. “Ferrari doesn’t even consider an entry model.”
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