Name: Claire Kerrison
Title: Senior Market Analyst, Professional Displays
Company: Futuresource Consulting
While the commercial flat panel display (FPD) industry was pushed forward by consumer TV manufacturers that tempted buyers with ever-greater resolutions, the front projector industry was allowed to progress at a rate it dictated. As time passed, this resulted in an expanding gulf in specifications between the two technologies: In 2013, Futuresource’s Pro Displays Trackers found that 68 percent of global front projector volume sales were SVGA and XGA, while a staggering 85 percent of commercial FPD sales were 1080p.
The disparity failed to significantly affect projector sales—the resolutions offered by mainstream projectors were deemed adequate. However, as commercial/consumer FPDs became larger, and more importantly, cheaper, mainstream projection faced mounting competition.
In 2013, global mainstream projector sales declined more than six percent, despite the opportunity provided by relatively low penetration rates in emerging territories. It was the threat caused by this decline in sales that sparked a more rapid evolution in projection technology. In late 2013, Texas Instruments launched a lower-cost 1080p chip, which enabled vendors to launch HD lines dedicated to the entry-level B2B market for the first time. Such models helped drive the global mainstream market to experience growth of eight percent year over year (YoY) in 2014.
Projectors evolved in other aspects, too. An influx of laser-phosphor models targeted at the high end of the market in 2014 offered end users a solution that was not only maintenance-free, but also one that boasted a superior contrast ratio, wider color gamut, and no orientation limitations, as well as a multitude of other features. Laser-phosphor sales contributed to 4.2 percent of global greater-than-5,000-lumen sales in 2015, an increase of over three percentage points YoY.
Today, solid-state illumination (SSI) continues to develop at a swift rate, with new launches broadening the current scope of specifications. New technologies are coming to market, such as the HLD LED from Philips, and laser-phosphor is now cheap enough for certain vendors to target the education space.
Concurrently, the pace of lumen upgrades is quickening, and connectivity options are advancing (after years of being dominated by VGA). A form of wireless connectivity was integrated into 11 percent of mainstream solutions in 2015, up seven percentage points YoY.
However, despite this accelerated rate of development, the mainstream projector market is forecast for longterm decline (minus eight percent compound annual growth rate 2015-2020). Contributing to this is increased competition in the education space, as mobile PC adoption is expected to mount and by 2020 attribute to more than 75 percent of global K-12 spending. Compounding this issue is the threat of FPDs in both education and corporate applications. Flat panels, including interactive solutions, are becoming more affordable, and, most importantly, boast a trait that projection has now lost—it is aspirational, seen as futureproofing.
Global sales of commercial FPDs to presentation applications rose 57 percent in 2015, while interactive flat panels increased 96 percent, a trend that is only going to mount following the launch of Microsoft’s Surface Hub, which has been widely regarded as a gateway device for stronger sales of interactive devices into the corporate application in particular.
This has culminated in fierce competition in the mainstream projector market, the value of which sank by 12 percent YoY in 2015 (three percentage points more than volume). An increasing number of vendors are now targeting the more lucrative installation space in search of greater margins. In fact, ISE 2016 saw 11 vendors launching 8,000- to 12,000-lumen solutions.
This flood of models by multiple brands is significantly affecting brand dynamics in a segment that has been dominated by a select few for years. There are several factors helping mainstream players gain traction in this notoriously closed space. One is the aforementioned rise of SSI, the other is the fact that integrated blending/alignment technologies are, for the most part, deemed “good enough.” The demand for SSI in high-end applications (such as VIS/SIM, CAD/CAM, staging) is so prevalent that research by Futuresource has found that end users will adopt the first solutions that fulfill their unique requirements, regardless of brand. Additionally, enhanced integrated feature sets are enabling less-specialized integrators to work in increasingly niche areas. Such integrators typically do not hold the same level of brand loyalty as specialists, a fact that, coupled with mounting demand for SSI, is helping mainstream vendors gain traction in this segment.
The 5,000 to 7,000-lumen segment is already reeling against the effects of the heightened competition, with value there increasing only two percent YoY in 2015, compared to a volume gain of 13 percent. Once margins decline here as they have in lower-brightness segments, vendors will be driven to higher levels. However, the installation segment offers a finite level of opportunity. Once the ceiling of digital cinema has been hit (which will remain the stronghold of the likes of the largest, best-known brands), there will be nowhere else to move.
In order to combat this inevitable progression, the industry is seeking alternative applications, such as digital signage, which has finally become a viable reality given recent technological advancements.
Regardless, the brands that integrators, especially those working in high-end verticals, can or will work with are going to change. In the short term, it will become more crowded. Longer term, the remaining vendors will battle for what value remains.