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By: Richard Del Cazzo
Web site: http://www.hdtv-hdtv.com
Demand for front projectors is surging in the Europe, Middle
East and Africa (EMEA) region, as market momentum builds for
large-size TVs in advance of the Euro 2004 soccer championship
in Portugal and the Summer Olympics in Greece.
Front-projection sales in the region rose at their fastest
rate of the year in the fourth quarter of 2003, up 70% from
the third quarter, iSuppli/Stanford Resources estimated. EMEA
front-projector sales will rise 50% to 1.4 million units in
2004, due to the looming sporting events, and falling prices
spurred by fierce competition and favorable exchange rates.
Strong sales in retail outlets of crossover front-projector
products, i.e. devices that serve as both corporate presentation
devices and as home entertainment devices, also are boosting
the market.
The booming growth of front-projector sales for home entertainment
systems comes at a time when a debate is raging over which
technology will emerge as the dominant next-generation large-size
TV. While proponents argue the merits of plasma, LCD and rear-projection
TVs (RPTVs), front projectors are quietly gaining ground.
Consumers are attracted to front projectors by their portability,
superior features, and, most importantly, lower prices
with products available for less than 1,000 euros.
A small ultra-portable projector with a 999-euro price tag
can present the biggest screen image in the industry, at 100
inches or larger, which neither rear projection, nor plasma,
nor direct-view LCD TVs can touch now. This gives front-projectors
an important edge in the market, especially when it comes
to serving the needs of European pubs and clubs for the upcoming
sporting events.
Looking beyond Europe, the worldwide front-projection market,
including all microdisplay technologies i.e. LCD,
DLP (digital light processing) and LCOS (liquid crystal on
silicon) reached 2.5 million units in 2003, up about
44% from 2002. Most of the growth came the fourth quarter,
with a 39% growth on quarter.
The worldwide front-projection market is expected to reach
3.7 million units in 2004 and 10 million units in 2008, with
most of the growth generated by low-end crossover or home-entertainment
products.
EMEAs strong growth in the fourth quarter made it
the world's leading region in front-projection unit
sales, with 41% of the global market. The rise in European
sales was pushed by demand for crossover products, with sales
primarily to small- to medium-sized businesses, for home entertainment
and for the educational market.
With the price erosion in 2003, there has been a definite
shift in the distribution channels toward retail. Exchange
rate fluctuations between the dollar and euro also have helped
reduce prices, as OEM deals are usually conducted in dollars.
Sales in the EMEA market in 2003 have been fueled by one-time
special offers, promotions of specific products and large
educational buys. The Aldi retail chain store in Germany,
Austria and the Netherlands sold a large number of front projectors
in the fourth quarter due to offers and promotions. During
the same period, a major educational purchasing program in
Turkey generated huge sales.
Although the second quarter is often the slowest period of
the year in the EMEA front-projection market, the unique factors,
like Euro 2004 and the Summer Olympics, will make 2004 different.
Hoping to cash in on this growth, brand manufacturers are
gearing up for even greater price competition for larger market
share. The intense price competition, combined with other
developments in the market, have caused changes in market
positions of the leaders. Some suppliers have gained or lost
as much as 3 percentage points of market share even
within the same quarter.
Although unit growth for the EMEA and global markets was
quite impressive in 2003, revenues growth has lagged far behind.
Manufacturers struggling with low profit margins have been
attempting to make up for it by increasing their volume.
This trend has spurred iSuppli/Stanford Resources to cut
its price forecast, but hike its unit projections
which leave its revenues forecast largely unchanged. Even
with the spectacular growth in units, projection companies
will have a hard time maintaining their gross margins and
revenues growth.
Will there be sufficient component supply to support the
ever-increasing demand for low-end front projectors, especially
in 2004?
RPTVs also are experiencing strong growth. The total front-
and rear-projection market is expected to reach 5 million
units in 2004.
This is putting extra pressure on the supply of components,
such as chips, panels and lamps. Brand manufacturers are striving
to balance between the need to reduce prices and sufficient
supply to support expanding retail sales in 2004.
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