Aggressive pricing and competition is going to make it a tough year for projector vendors and their channel partners, but rising demand in the consumer market and the promise of smaller and portable models means there's still plenty of opportunity out there.
You can never step into the same river twice, said an old philosopher. But if you are a reseller in the projectors market looking for an indication of a dramatic new trend, technology or demand-based opening to shift a substantially larger number of beam-throwers than last year, you'd be right to send the old Greek fella a message from the future.
The good news is the market is solid, the education sector is still placing orders and the home-theatre aficionados are not thinking about introducing more Earth Hours into their viewing habits. And both vendors and distributors are working hard to alleviate margin erosion caused by market saturation. The bad news, as corporate strategists like to put it, is there is a war out there.
Although IDC figures show the projectors market putting in a steady performance over the last couple of years, tough pricing, new models and market entrants, coupled with shifting consumer preferences, have all taken the gloss off otherwise persistent product demand.
According to IDC associate market analyst for PC hardware, Felipe Rego, the number of projectors shipped in Australia grew by 3.8 per cent from 2006 to 2007.
"It is not the same pace as the PC market [mainly due to a longer lifecycle], but [the projectors space] still showed considerable growth," Rego said.
As Chinese vendors, in particular, continue to push cheaper products with higher specifications into the market, competitive pricing will remain one of the key culprits leading to market saturation. This trend is expected to last for at least another couple of years. In unit terms, this means that while vendors continue to up their sales expectations in the broader Asia-Pacific market, local projector sales are likely to drop slightly from 95,918 in 2007 to an expected 94,000 in 2008.
Rego claimed most sales over the next couple of years will come from the sub-$1000 market, which is at the same time going to place heavy demand on higher specifications (XGA) products. "Prices have been declining considerably as new models come to market in a very quick way, replacing older [models] and pushing the price down," he said.
"There has been strong demand for projectors that are portable and with hassle-free features, and developments in colour and light output technology are helping drive more growth. In this sense, more high-end models, with full high-definition resolutions are also in the spotlight, although still small in volume. [But] in terms of average selling value, there is a clear move towards cheaper products."
In other words, at the current level of competition the average value of the whole market is heading south. But if there is any weakness on the battlefield, the projector warriors are not showing any signs of fatigue.
The IT Market Insights report shows Epson, NEC and Acer as the projector market leaders. With fourth quarter sales of 5075 units, Epson increased its leadership by 4.2 per cent over the previous quarter to 21 per cent market share. Roughly equal to Epson is the combined market share of NEC and Acer, who have sold 2811 and 2804 units respectively, giving them 11.6 per cent and 11.57 per cent share of the market.
Although brands like Optoma, Viewsonic and BenQ are showing significant market share based on new sales in the entry-level space, their tallies based on revenue are still well behind the leaders. But those vying for the rest of the pie claim there are a few crumbs yet to make it worthwhile fighting and a few lucrative market segments.
Six months ago, local distribution outfit, Image Design Technology (IDT), decided to team up with US player, Planar, to bring out a limited distribution model for up to 25 Australian resellers willing to engage with the newcomer. Already a distributor for NEC and InFocus and a specialist in the imaging projection market, IDT was aware of the challenging times in the projectors game but decided its Planar distribution model offered an attractive proposition to local resellers.
"The message is that the projector market is not dead - it is still growing - and it is a strong market," IDT managing director, Gerry Wilkins, said. "Yes, it is a challenging time in the projectors market. But one of the things we're trying to do is bring some stability in the market with a tightly-controlled distribution model."