CONTENTS

Education segment drives projector sales

Increasing technology adoption by India’s fast growing education sector is evolving into a big business opportunity for leading companies and their channel partners. By Manjari Juneja

From its introduction, a projector has always been a business device specifically used for visual communication in the corporate world. Nowadays, projectors are not only a business tool but they are also an essential component of the education system as well as an option for home entertainment and gaming. The Indian projector market has seen considerable growth with the latest trends.

The Indian projector market in 2010 stood at about 180,000 units and is likely to cross 300,000 units in 2011. 35% of the market is being contributed by pico projectors. As per one of the leading research agency tracking the projector market globally, the worldwide front projector market will grow by 18% in 2011. However, overall market activity is expected to remain relatively flat, with market growth expected to continue to come from emerging markets with Latin America, China, India, Russia and Indonesia.

According to the latest industry report by Future Source Consulting, the global market for projectors reached 1.98 million units in Q3 2011, representing year-on-year growth of 4%. According to the report, the Indian business projector market grew 22% in H1, FY2011 versus H1, FY2010. The growth has essentially been fueled by the growing demand from the education segment which constitutes nearly 50% of the overall projector market.

The projector market in India is extremely cluttered and fragmented with 20 plus brands operating in various categories. With the latest HD and short throw projectors, home entertainment is getting a shot in the arm. 3D projectors are also making this category more attractive for 3D gaming and entertainment.

"Projectors are among the fastest growing product lines in India thanks to the booming education market." Hemendu Sinha Business Head B2B, LG India

Hemendu Sinha, Business Head B2B, LG India, said, “Projectors are one of the fastest growing product lines in India thanks to the booming education market. Changing lifestyles, decrease in price and growing spending on electronics has led to an upsurge in demand for high-end products including projectors. The market in India is expected to grow at around 30%. There are also various emerging segments, which are booming with demand for projectors.”

With IT infrastructure spending becoming an integral part of every business budget, projectors have become an essential asset for any organization. High-end projectors are also in demand in the simulation industry. The projections are for 325,000 units to be shipped in 2011 and 500,000 units in 2012. For 2010, the industry shipped about 200,000 units. While the global projector market is growing at 20%, India is growing at 60% CAGR.

As per market estimates, the total addressable market (TAM) for projectors in India is around 65,000 units per quarter. According to CMR Research, 2011 got off to a good start for the Indian Digital Projector market with a growth of 38% year-on-year (1H 2011 vis-à-vis 1H 2010). The first half of the year is usually dominated by the education vertical and this year was no different.

The demand from the education vertical is on account of the healthy influence of Government of India schemes such as the Sarva Shiksha Abhiyan, which aims to make universal elementary education available to all children between the ages of 6-14 as mandated by the 86th amendment to the Indian Constitution making free and compulsory education a Fundamental Right. The program as well as the greater general awareness due to forces of globalization has given momentum to the drive for adoption of modern teaching aids and technologies by educational institutions as a whole.

Since the Indian digital projector market is highly fragmented and competition is intense, a reshuffling among top vendors took place during this period.

Prevailing trends

Strong economic growth coupled with rising purchasing power is driving demand for consumer electronics prompting manufacturers to come-up with richer feature sets for consumers. Wireless connectivity, LAN connectivity, interactivity, ultra short throw and 3D technology are the new trends prevailing in this category. Today PC less projection is becoming popular, which means that customers can project their contents or presentations directly from a pen drive.

Traditionally, the IT sector, BPO, cinema, corporate and government have been leading buyers of projectors. However, during the past two to three years, education has emerged as a significant consumer of these products. As institutions integrate ICT with education, the demand for digital projectors has grown. Education has clearly emerged as biggest consumer of projectors contributing to over 30% of the Indian market for these devices. According to a research report, the Indian higher education sector will surge at a CAGR of 15% by 2013.

A tremendous lift is evident in demand for the latest technologies like 3D. Both LCD and DLP projectors are in demand, and gradually the market is witnessing a trend towards LED Lamp technology. Young consumers are purchasing high-end products like home theatre projectors to have their own movie screening experience in a special home theatre room. SVGA resolution is now shifting to XGA.

Harish AK, Senior Business Manager – Visual Instruments, Epson India, commented, “The market is moving from SVGA and we are seeing an increase in the share of XGA projectors. SMBs and large corporates are looking at technology solutions with features like wireless and PC-less applications. Interactive projectors have tremendous potential in the education vertical where classrooms are provided with interactive solutions. Another interesting vertical is the home where sales of 1080p (Full HD) projectors are increasing considering the cost reduction and we expect that there would be good demand in the future for Full HD 3D projectors in India.”

The 3D projection market in India is gearing up with new brands, solutions and technologies. Today the 3D technology has is consumer-oriented. It has been made affordable so that educational institutions can afford to use this technology for providing a better learning experience to their students. 3D technology is also beneficial in higher education. Dissections in medical science now can be done through this technology. In the fields of engineering, medicine, architecture etc., 3D has empowered teachers and students with a life-like experience for learning. 3D-ready projectors enable students to visualize complex concepts, such as geometric shape calculation and gain true-to-life experiences such as dissecting the human brain through 3D demonstrations with the help of suitable educational media.

"3D projection enriches professional productivity & personal entertainment." Abhilesh Guleria Country Manager, MMPG & ITPF Business, NEC India Pvt. Ltd.

Abhilesh Guleria, Country Manager, MMPG & ITPF Business, NEC India Pvt. Ltd., said, “3D projection has become an extraordinary experience that enriches our professional productivity and personal entertainment. For businesses, it has become essential to deploy audio visual equipment including a projector in order to create the right impact. Small business setups and classrooms require projection to attain an impressive display. Until now projectors have mostly been sold to the education industry and to enterprise buyers. However, a number of factors, such as the rising average size and a range of affordable new projectors, are making the technology a good buy for home users. Whether you want to create a home theatre or an excellent gaming set-up, today’s 3D-ready projectors have a lot to offer at an affordable rate with a mobile display. Apart from movie-watching, 3D projectors today are also in demand with the gaming community.”

Embedded mobile projectors are close to finding their way into consumer electronics. This projection technology will help to pave a way for projectors that are built into devices such as mobile phones. The Ultra Short Throw projector technology enables a 60” image to be displayed at less than three feet. It’s designed to eliminate the problem of the presenter’s shadow falling on the screen or distractions from ambient light.

Education, the biggest driver

Primary education has been one of the fastest growing verticals for projectors followed by the government sector which contributes around 10% and BFSI. With the introduction of pico projectors, SOHO is also emerging as a new vertical. As institutions have moved to integrate ICT into education, the demand for digital projectors has increased considerably over the years.

"With the introduction of portable pico projectors, the SOHO market is opening up." Saji Kumar Head - Product Management, Acer India

Saji Kumar, Head - Product Management, Acer India, said, “Customers are looking for newer form factors and leading edge technology with features such as portability, instant usability etc. at a cost-effective price. We expect growth from verticals like primary education, government and BFSI. With the introduction of portable pico projectors, SOHO is opening up as an emerging category.”

The education sector has adopted the e-learning and audio-visual mode of integrated learning. Earlier, only a few technical colleges had the luxury of a computer lab but now well-equipped labs are seen even in schools.

The advent of 3D technology in the education system marks a shift as this is bound to better equip the teachers in imparting knowledge. Education is moving out of the realm of the blackboard, classroom and conventional methods of teaching to a digitized mode of imparting knowledge. Since the integration of technology into the classrooms is a priority, educational institutes are deploying 3D projectors to inspire imagination and creativity amongst students

Profitable business for channel partners

Selling projectors is a profitable line of business, especially when one focuses on solution sales rather than pushing the basic models. A complete end-to-end solution provider can easily earn a considerable percentage on every projector sold. Currently, projectors have become an essential item in every reseller’s product basket. With technology becoming an integral part of doing business and educating, sales are bound to grow in the near future.

The opportunities are immense as both private sector companies and government organizations upgrade their IT infrastructure.

The percentage of serious channel partners in the projector business is quite low. This category of business is either dominated by large solution providers or by the traditional office automation channel.

Kumar said that Projector business was more of consultative selling rather than box selling. Partners had to be prepared to provide the required technology solutions to their customers. As the market size is increasing and the margins are shrinking, consolidation in the partner ecosystem is expected within two to three years.

Ajay Sharma, Country Manager, ViewSonic Technologies India Limited, said, “Projectors are generally priced between Rs 25,000 to Rs 3,00,000 and any channel partner with the capacity to stock products in that price range can enter the projector business. With IT infrastructure spending becoming an essential part of every business budget, projectors are on their way to becoming integral to any organization. Education has clearly emerged as the major buyer for projectors contributing to over 50% of the total projector market in India. With this development we can foresee a bigger scope for the channel partners in the projection business.”

Complexities involved

In the projector business, partners are required to provide end-to-end solutions depending on the requirement and applications of customers. More often than not, the solutions provided depend on the business deal. In such cases, partners are required to support their customers’ right from installation to integrating the same with various other input sources. This requires accurate planning, seamless execution and after sales support. Since the competition is high in this sector, partners face the problem of pressure on profit margins.

The other challenge is that the need for a projector can be substituted for by LCD or plasma displays. Some projector demand is getting replaced by large format displays (PDP & LCD) which does away with the demerits of projection technology including switching off the lights, changing the lamps and regular maintenance etc. Moreover, large plasma displays are used for a dual purpose of videoconferencing apart from presentations.

Besides, partners need to possess domain knowledge. With projectors becoming extremely commoditized, partners face a challenge in positioning them as a solution rather than just a commodity.

Rajeev Singh, Country Head & General Manager, BenQ India, said, “There are some common problems that partners face. Companies do not have proper margins for their channel partners; there is ambiguity with regard to the policies that companies have leading to problems in coordination. Partners often face problems in claim settlements. Proper escalation metrics and insufficient marketing support are also an area of concerns for the partners.”

A Channel partner from Elcom Technologies, Nehru Place, said, “As the projector market grows, we see volume increasing but sales margins are on the lower side. Stiff competition is a challenge; with the market expanding lots of players are entering.”

3D to take over

In the recent past, customers have increasingly opted for small form factors. They are also cautious about the durability and lifespan of the product. While purchasing, customers focus on technologies that offer longer lamp life at a reduced cost. Eco friendly projecting technology, reduced standby power consumption, better contrast ratio, higher lumens, ultra short throw lens are some of the trends that customers are likely to focus upon in the future.

"LED lamp based projectors are coming into fashion nowadays but pricing presents a challenge." Vineet Mahajan Head Sales (Professional Display), Panasonic India

Vineet Mahajan, Head Sales (Professional Display), Panasonic India, said, “The LED lamp based projectors are coming into fashion nowadays but pricing presents a challenge. In the current scenario, we don’t see a drastic emergence of pico projectors. However, we believe that the technology will witness high demand in the coming years. Further, these projectors have the capability to overcome screen size limitations that exist in mobile electronics devices as they are capable of projecting large images irrespective of their size. Secondly, 3D technology in projectors is catching on in India.”

Portable projectors are going to be the next buzz word. These projectors will be used by business people for delivering business presentations and training material etc. In addition, a number of meeting rooms also tend to buy a portable wireless projector.

3D looks likely to swallow up the 2D market because it is more efficient in terms of detailing. It will percolate into e-learning and smart classroom teaching. Earlier, it was a challenge but now with NVIDIA/ Intel having made the technology affordable, things are changing. As of now, smart classroom initiatives are more in the private sector and there are hardly any incentives and subsidies from government bodies. 3D technology will be an immense help to the education sector in case bodies like the NCERT and AICTE adopt the same.

manjari.juneja@expressindia.com