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Front Projectors Targeted For Growth

2/21/2011 12:01:00 AM Eastern
NEW YORK — Although flat-panel TVs continue to dominate the U.S. home-theater marketplace, manufacturers of front projectors are expecting renewed growth in their categories this year as the economy improves and new technologies bring new excitement.

Currently, much of the new home-theater projector market growth is being driven at both the entry end, where applications for crossover business and hometheater uses continues to bring customers into the big box and online environments, and the high-end, where well-heeled consumers continue to look for the latest and greatest.

At the same time, established players at the low-end are also moving upscale while some upscale manufacturers are seeing more business from down-scaled products, “so everything is kind of bleeding into the middle,” observed Tamaryn Pratt, Quixel Research principal.

“The market is really bifurcated right now,” she continued. “On one end, there is demand for affordably priced low-end products and specialized products like Epson’s DVD/3LCD combi projector. At the other end, there are companies like JVC, Sony, Sanyo and Runco that are seeing activity at the middle of the market.”

According to Quixel market estimates made after the third quarter of 2010, the total U.S. home-theater front-projector market was expected to rise 32 percent to 150,899 units for full year 2010, and should rise another 3 percent this year to 155,346 units.

Manufacturers and analysts told TWICE that one growth segment in the midrange is coming from models with new light sources, like LED light systems that don’t directly replace traditional projector sales.

“The reason is that this is mostly new business at present,” said Jon Grodem, Optoma product marketing senior director. “Also, we will see brightness improving to create multiple segments in LED-based personal portable projectors with price points in the $500 to $700 range. We expect this segment to appeal strongly to the mobile professional.”

Pratt said she was calling for a significant amount of new business in the less-than-$1,500 1080p projector segment, which has been driving consumers into stores.

On the other hand, Runco, she pointed out, is doing a good amount of business in down-scaled models (the LS3 and LS7 series are the company’s biggest sellers) and is also enjoying some business at the very high end ($250,000 projector) level, working exclusively through installers and A/V specialists.

Though the actual unit numbers may be small in comparison to entry-level goods, Adam Schmidt, Runco general manager and VP, said his company is expecting a return to growth in the high-end in 2011.

“Runco has completely revamped its high-end offering with a handful of new cinema projectors,” he said. “This boom in the high-end segment is driven by the growing — and currently largest ever — population of high-net-worth-individuals in the world. There are more than ever before. They have more of their wealth concentrated in residential real estate than ever before, and they are demanding top-of-the-line theaters and cinemas for their homes.”

Runco rival Sim2 saw a similar trend and recently took steps to emphasize upscale offerings and to move away from less-profitable lower-priced goods.

Digital Projection, meanwhile, had a phenomenal fourth quarter, Pratt said. The company saw good volume playing closer to the entry end of the business, without disrupting a good flow of product at the high end in the Titan projector series.

At the lower end, meanwhile, companies like Vivitek, Epson, Sanyo, Casio and Optoma are enjoying new opportunities from advanced video gamers, mobile business professionals and institutional/educational channels.

This, in turn, has encouraged more big-box electronics retailers to add projector departments, said Rick Nguyen, Vivitek general manager/senior VP.

“The projection category has been pretty stable the last 10 years, but with new technologies such as 3D, LED, integrated/interactive projectors, solid state and 2D-to-3D conversion, projectors are showing a new life that retailers are finding exciting,” Nguyen continued.

Casio introduced its first projector based on a hybrid LED/laser light source in January 2010, and “we were very successful, having enjoyed a doubling of our projector sales for our best year to date,” said Joseph Gillio, Casio projector marketing director. “The projector was positioned as the brightest bulb-less projector in the market. He said the applications and target audiences were wide ranging, and included strong sales in the home theater and gaming markets.

Customers were attracted to the bright picture, rich colors and low overall cost of ownership through the use of a low-power light source, said Matt Mustachio, Casio projector group general manager.

Epson enjoyed the second-best-selling projector in the industry last year in its MovieMate DVD combi model with 540p resolution and a $550 street retail, said Quixel’s Pratt. A lot of consumers bought the product for family movie nights in the back yard under the stars, she observed.

Pratt said inexpensive models with 480p to 540p resolution amounted to about 11 percent of category sales in fourth quarter of 2010.

Despite the difficulty in presenting in-store demos, big-box CE retailers and large regional chains were selling projectors off the shelf or online, industry observers said. Interestingly, channels like warehouse clubs and discount department store chains have yet to take off with the category.

“As users become more knowledgeable and technically savvy, we see the need for live demos diminishing. Buyers are researching using enhanced online content and are then using informed decisions to buy. We are seeing a strong synergy between online content and in-store experience,” noted Optoma’s Grodem.

Much of the business is coming from crossover business data projectors that can also be used in the home theater on weekends, and from educational departments looking for cheaper and cheaper products in a time of constricting budgets.

One strong selling point here is high brightness output (2,000 ANSI lumens and better for institutional channels), and models that can handle 1080p HD source material, for those times when the projector is taken home or used to present movies and special events in class rooms and auditoriums.

With prices for 1080p HD starting at less than $1,000 in some cases, some consumers in big-screen sizes that can match the value.

Newly emerging trends in the business include models with wireless HDMI support to easily facilitate wireless networking hookups and easily move projectors from room to room.

As for 3D, front-projector manufacturers have a wide range of price points and performance levels to choose from this year, reflecting the general sentiment that 3D is yet another opportunity for their technology to shine.

“3D is done best big and projectors do big best,” observed Grodem. “Home theater is the natural fit for 3D. A second market [for 3D] is gaming ... as the new gaming technology moves in the players and consoles, fully immersive huge images are exactly what is wanted.”

“As content becomes more available and as people experience good (and bad) 3D, it’s clear that the best experience is an immersive experience, in a home theater,” Runco’s Schmidt pointed out. “A projector compromises neither brightness, nor resolution, nor comfort. Runco’s D-73 hits the mark on all fronts, and the initial response to it has been tremendous.”

“The future for 3D looks very promising,” agreed Vivtek’s Nguyen. “Most of our data projectors are currently 3D ready. We are also launching a line of projectors that has built-in 2D-to-3D technology (without an external box). We’re being very aggressive with our 3D product line in terms of technology and price points.”
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