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Opportunities Dot Slowing Front-Projector Market

6/20/2011 12:01:00 AM Eastern

NEW YORK — So far this year, the market for hometheater-
focused front projectors, like many other CE categories,
is growing at slower-than-expected levels, but
analysts and manufacturers are seeing pockets of new opportunities
emerging in certain markets, namely the highend
market and the low-end combo DVD market.

Conversely, the market for data projectors is growing
at healthier levels as corporations, government offices,
schools and universities increasingly look at
value-added display systems that are more economical
to maintain.

On the home-theater projector side, Tamaryn
Pratt, Quixel Research principal, said unit sales
are up about 3 percent over 2010 levels at this
time.

“This is a little soft compared to last year’s increase
of over 30 percent due to the more significant
increase in availability of lower-cost 1080p
models,” she said. “We’re expecting a 6 percent
decline in revenues over 2010, which was flat.”

Quixel said the home-theater projector market last year
shipped 150,899 (units) for $306 million in factory dollar
value. It is forecasting dollar volume to drop 6 percent to
about $287 million in 2011.

Some of the better growth segments of the home business,
she said, appeared to come in models with alternative
lighting systems to bulbs — like LED. But as with other
new tech CE segments, this too has felt the pinch of the
economy.

“LED projector sales were really hot out of the gate and
there was plenty of excitement. However, once the initial
demand was saturated, we’ve seen sales stall,” Pratt said.
“In a rough economy the prices are still steep, although
DPI recently dropped the price of their LED unit, and there
was a little lift.”

Hindering projectors with the new light sources, she
said, are high manufacturing costs and limited overall market
volume.

“For there to be a significant adoption, we’ll need to see
LED projector price points for consumers around $6,000
or $7,000.”

Alberto Fabiano, Sim2 USA executive VP, called customers
embracing LED “gratifying,” adding that for his company,
“it is a thriving segment with our Liquid Cooled MICO.
Look for a new, brighter model coming to market soon.”

Meanwhile, 3D is generating some interest among
front-projector enthusiasts.

“It is a feature — a needed one,” Sim2’s Fabiano said of
3D. “No new performance units should be designed without
it. Our product line will feature 3D at key price points.”
Quixel’s Pratt said that for projectors, 3D “makes sense
because it is immersive 3D, not 55- or 60-inch
3D. Even the usage makes sense as people primarily
watch movies or sports events with their
projector, and in those instances people can accept
wearing glasses. JVC has been very successful
with their 3D projector, and we are seeing
strong numbers out of the gate for Sharp’s new
model.”

Pratt predicted the industry will see a new class
of entry 3D products in the fall, and to “expect a
$200 to $300 price delta for the feature.”

Meanwhile, manufacturers like Sim2, who have
turned their attention to the small, but relatively economyresistant,
upscale home-theater market, said they see expansion
on the horizon.

“It is curious, and clearly not reflecting other’s experiences,
but our dealer base has not shrunk this year,” said
Fabiano. “If anything, we have opened a dozen new highcaliber
dealers to date.”

Pratt explained that players like Sim2, DPI and Runco
are “holding up the high end. There has been limited unit
growth, but the price points are steady and even increasing.
But, interestingly, several of these high-end manufacturers
have become very successful downstream (sub-
$10,000). The aspirational customers who purchase the
entry BMWs are also interested in buying an entry DPI or
Runco model.”

“It will be interesting to see the longer-term effect on the
midrange market players like JVC and Sony as it is unclear
if we can grow the pie,” she added.

At the entry end of the business, Epson and Optoma
“are the clear leaders,” she said, adding that Epson continues
to do well with its WSVGA all-in-one projector/DVD
combo model at $599.

“For this reason alone, low-resolution projectors are still
alive,” Pratt said, adding that the next move to a 720p or
even a 1080p combo model is inevitable.

“Last quarter, 77 percent of the market was
1080p, and all of that volume was derived from
single function models,” she said.

At retail, the days of front projectors being
the exclusive domain of custom installers are
clearly in the past.

Mainstream CE dealers like Best Buy have
embraced the category “very successfully with
entry models joined by online resellers who are
also doing very well with the category.

“E-tailers like Projectorpeople.com and Visualapex
fuel a significant portion of the overall
home projection business. Models priced
above $3,000 are almost always sold at regional
and independent retailers or custom installers,”
said Pratt.

But more and more retailers are also embracing
data projectors — tending to display such
SKUs in the PC department rather than alongside
home-theater displays.

Frank Romeo, Casio projector VP, said the
company’s business and educational sales for
its Green Slim-series projectors are running 12
percent above last year’s levels, with its distribution
channels “almost evenly split between retail,
pro A/V (for educational sales) and distributor.”

Romeo said the company’s targets right now
have doubled after the company seeing growth
of more than 200 percent every six months.

“Home-theater sales are going down and we
do not sell a home-theater projector at this time.
Everything we do is widescreen data projectors,
with our business skewed to commercial
applications,” he said.

Romeo said the secret to Casio’s success
has been its non-lamp-based technology that
can produce more than 2,000 lumens of brightness
from a hybrid light engine using LED’s and
lasers.

At InfoComm this month, Casio launched 12
new models in three series, many of which have
been upgraded to include networking capability
for remote monitoring and servicing. Many
also now support 3D using optional activeshutter
glasses.

One of those series will feature shortthrow
models, which represented a
growth segment in 2010 but have hit a
speed bump this year, according to one
analyst.

According to Pacific Media Research,
sales of short-throw projectors,
mainly due to the impact of interactive
white boards, have decreased
almost 20 percent this year from a
year ago.

The majority of Casio’s sales have
come from standard-throw projectors,
Romeo said. However, he said that
sales should pick up as the educational
market, particularly K-12 school systems,
opt for less-expensive standardand
short-throw projectors rather than
pricier interactive white boards.

According to Pacifica Media, the
K-12 projector market from 2008 to
2010 grew from 29 percent to 39 percent,
while government grew from 11
percent to 16 percent.

“The K-12 market seems to be going
through some resurgence, and we are
seeing a lot of bids coming through,”
Romeo said.

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