Projector Market Can’t Support 35 Brands, Says Pacific Media’s Coggshall at Projection Summit

LAS VEGAS -- “The problem with the projector market … is it’s stagnant,” said William Coggshall, president of market research firm Pacific Media Associates, leading a session on industry market trends at the Projection Media Summit, here, Tuesday. The projector business has trickled to single-digital growth in both units and dollars, Coggshall said, and profits are being squeezed as more Taiwanese manufacturers flood the market with low-priced machines.

While most companies in the segment are still “marginally profitable,” some manufacturers, “particularly the Japanese ones,” are reluctant to fire employees so they continue operating as usual “when the resources might be better allocated to a more promising area,” Coggshall said. The result is “too many companies for too small a market,” he said, saying the industry can’t support the 35 brands now being sold.

Several companies are “just getting along,” he said, saying they “don’t like it when you identify them.” Too many brands trying to feed a market that can’t sustain them has led to a price war, Coggshall said, and “conservative” Japanese companies are being outsold by Chinese companies focused on price. Neither business philosophy leads to creativity or innovation to expand the market, he said.

Competition from flat-panel displays continues to be an issue for the projector market, Coggshall said. According to a Pacific Media survey of 1,000 dealers and end users, better ambient light topped the list of reasons users preferred flat-panel displays to projectors, followed by easy implementation of videoconferencing, more appropriate sizes for smaller meeting rooms and the preferred aesthetics of a TV that hangs on the wall.

Although there are “sweet spots” in the market, growth in those segments has had a magnet effect, and “everybody’s trying to be in them,” leading to “way too many companies” targeting those opportunities, Coggshall said. Virtually all the volume in projectors is in the 2,000-3,500-lumen range in unit sales, he said. Another bright spot is in sub-25-lumen projectors, but that category is made up mostly of Sony camcorders with built-in projectors, he said. Companies haven’t done enough to try to expand the market to create new opportunities, he said, saying there are a lot of unequipped conference rooms there for the taking, but the industry hasn’t done enough to get into those spaces.

In the 1,000-lumen-and-higher category, 11 companies have 80 percent of the market in units, Coggshall said, leaving 24 companies to divvy up the rest, resulting in less than 1 percent market share per company on average. By revenue share, the top 11 companies have 70 percent of the market, “still not a lot of revenue for that 35th company in the business,” he said.

Epson, the market leader in units, had a 22.5 percent share in projectors last year, more than double that of runner-up BenQ at 10.6 percent, Coggshall said. Following BenQ were Optoma (7.8 percent), NEC (7.3 percent), Acer (6.8 percent), Hitachi (5.6 percent), Sanyo (4.9 percent), Sony (4.1 percent), InFocus (3.9 percent), ViewSonic (3.7 percent) and Panasonic (3 percent). “Others” had a 19.8 percent unit share, he said.

By revenue, Epson’s share in 2011 led at 16 percent, followed by Sony (8.7 percent), Christie (7.5 percent), NEC (7.3 percent), Panasonic (5.6 percent), Sanyo (5.5 percent), BenQ (5.1 percent), Optoma (4.7 percent), Hitachi (3.9 percent), Acer (3.1 percent), Mitsubishi (2.8 percent), and the “other” category with 29.8 percent, Coggshall said. He said a company like Barco wouldn’t appear in the top 11 because it doesn’t sell a lot of units, “but each unit is a very expensive unit.” Barco and a few other high-end companies supplied data for the report but wouldn’t permit Pacific Media publish their names in the charts, Coggshall said.

U.S. and Japanese manufacturers’ shares of the projector market are shrinking, while Taiwanese manufacturers’ unit sales have shown consistent market share growth since 2002, Coggshall said, and Chinese makers’ sales are growing as well. Coggshall cited pricing trends, noting that a dozen years ago an XGA projector with 1,500 lumens sold for $5,000-$5,500 and a 42-inch plasma TV sold for $10,000. “Today you can get a pretty good XGA projector under 3,000 lumens for about $500 and a 70-inch flat-panel TV for about $2,000,” he said. The differential in price declines gives a flat-panel TV the edge in the decision-making process for a meeting room video solution, he said.

The projector industry needs to “stop selling standalone projectors,” Coggshall said, and focus on selling solutions to areas of the market not over-served. Companies doing that include Smart Technologies that’s working with teachers in the education market to help sell projectors. He mentioned Story Beam, an LCoS projector with 150 nursery rhymes built in that was developed by a Korean publisher with the goal of getting kids to read. The projector shines the stories on the ceiling, using the dim lighting attribute of LCoS that makes it a poor projector technology for home theater but useful in a room where consumers don’t want bright light. The projector system is “selling well at a high price,” he said.