Bright Future Projected for Front-Projection Home Theater
By Sweta Dash, iSuppli Stanford Resources -- EDN, April 2, 2003
Falling prices, lower weights and improved technology are making front-projection television systems more affordable and practical, opening the door for more consumers to enjoy a real big-screen home theater experience.
Front-projection home theater once was the exclusive province of affluent customers who could afford to dedicate an entire room to such a system. However, the latest generation of home theater front-projection systems is smaller, cheaper and provides a new flexibility that was never available before. With the new projectors, any room can be transformed into a home theater capable of displaying a picture as large as 100-inches, far bigger than today’s rear-projection or flat-panel televisions.
Previous front-projectors weighed 20 to 30 pounds and needed to be professionally installed on the ceiling of a room. Newer models can weigh less than 5 pounds, allowing them to be transported easily from room to room -- or even outside of the home.
Meanwhile, over the past year, prices for these projectors have fallen, their technology has improved, and consumers slowly are gaining more awareness of the product.
Because of these factors, front-projection home theater sales more than doubled from 2001 to 2002 on a unit basis, iSuppli/Stanford Resources estimates. Revenue growth in the market from 2001 to 2002 is estimated at 73 percent.
iSuppli/Stanford Resources predicts the front-projection home theater market will experience a near encore in 2003, with 80 percent unit growth expected. Revenue is predicted to post a 59 percent rise this year.
Such an increase is outstanding compared to overall front-projection market revenue growth, which was less than 5 percent in 2002.
Global front-projector home theater sales in 2002 amounted to 157,000 units, with revenue equaling $779 million. The market is expected to grow sevenfold in terms of units over the next five years, reaching 1.1 million units in 2007, iSuppli/Stanford Resources predicts. Market revenue is expected to triple within the next five years, reaching $2.5 billion in 2007.
The growth potential for this market will be even larger if prices drop further, the technology makes more improvements and there is a greater increase in consumer acceptance. Combined with more development of the retail distribution channel, the front-projection home theater market has the potential to grow to 3 million units in 2007.
Low-end projectors, priced at less than $5,000, constituted more than 71 percent of the unit share and 46 percent of the revenue share of the worldwide front-projector home theater market in 2002. The very high-end segment of projectors priced as high as $25,000 claimed only a 1 percent unit share and less than a 7 percent revenue share. The mid-range and high-end products account for the rest of the market.
Both low-end and mid-range products will follow a very fast growth path as prices drop in the future and products gain higher consumer acceptance.
While the market potential for front-projection home theater systems is huge, many challenges remain for makers of these products, not the least of which is educating consumers about the product. The actual growth the industry achieves during the next few years will hinge on how well front-projection home theater makers meet such challenges.
