2006 Projector Guide

Looking to buy a projector? There’s good news and bad news. The good news? The projector market is mature, so prices are lower than ever. The bad news? The projector market is mature, so manufacturers are squeezed on margins. If they can’t figure out how to turn a profit, they may abandon the business.

“The digital projection industry is extremely mature,” explains Eric Haruki, IDC’s research manager for displays and projectors. “At the beginning of this decade, we still had overhead projectors ruling the land. Slowly but surely, digital projectors started trickling out, and 1,000 lumen projectors were anywhere from $10,000 to $15,000. Now you can get the same thing for almost $500.”

With inexpensive projectors sporting brightness levels of 2,000 or more ANSI lumens, there’s less incentive to upgrade to the latest model. Reliability has also improved, which has increased the lifespan of the projectors. “Product obsolescence won’t necessarily take place for anywhere from four to five years,” says Haruki. “They’re still selling a lot of these projectors, but the growth is nowhere near what it was in the early 2000s.”

While unit sales are rising, profit margins are falling. “The projection market used to grow at a 45- to 50-percent annual growth rate just three or four years back,” says Sanju Khatri, iSuppli/Stanford Resources’ principal analyst for projection and large screen displays. “In 2006, the market is going to grow by about 22 to 23 percent. So the growth rate has gone down.” Even though more units are selling, overall revenue is declining. Khatri predicts that worldwide revenue for the front projection market will decrease from $6.9 billion in 2005 to $5.6 billion in 2010. “Margins are getting smaller as projectors are getting cheaper,” she says.

Projectors are also facing competition where previously there was no competition. “Within the corporate arena, flat panels are now penetrating into the projector space where flat panels weren’t found before because they were so expensive,” says
Haruki. “You can buy a 50-inch flat panel for $2,000, and you’ll have a lot more flexibility with varied viewing conditions from bright to dim. Whereas you need a fairly dim room to use a projector.” Khatri sees the same trend in her research. She has found some LCD screens, and to a lesser extent plasma screens, in conference rooms. “They typically have one projector for bigger screen sizes, and maybe an LCD or plasma screen for videoconferencing applications,” she says.

“It’s a phenomenal time to be a buyer,” says Haruki. “The education market can buy a $500 to $1,000 projector. And manufacturers are chomping at the bit to sell them in volume quantities.” Commodity-priced projectors have changed the playing field. “Dell has stuck with it and has become a major supplier of projectors,” Haruki explains. “Because people know the Dell brand, they want to keep the whole Dell corporate identity brand equity within their shop-Dell computers, Dell monitors, Dell printers and Dell projectors.” HP has also carved a niche for itself by offering quality projectors that complement other HP products.

The easy path for some manufacturers may be to migrate to higher-end, higher-margin models. “There’s a lot of competition with SVGA and even XGA projectors at 2,000 ANSI lumens, so you’ll see more companies introducing higher-margin products that are 4,000 to 5,000 ANSI lumens,” explains Khatri. That’s a class of projectors that was traditionally targeted towards large-venue, rental staging, boardroom and conference room applications. “You might see companies focusing less on the front projection market, especially companies that offer multiple technologies,” adds Khatri. “They may focus more on rear projection or flat panels for consumers, and just get out of the front projection market.”

The Great Divide: DLP vs. LCD
According to Khatri, worldwide sales of DLP-based projectors moved ahead of LCD-based projectors in 2005. She expects DLP to continue to increase its market share. “In the first quarter of 2006, DLP had 53.6 percent, and LCD had 46.1 percent,” explains Michael Abramson, Pacific Media Associates’ vice president for front projectors. “A lot of it has to do with the relative strength the manufacturers have in certain channels, and how those channels are doing in the projector market. If you have a manufacturer that is relatively strong in education, that will make a difference there.” Haruki has found a resistance to change with institutional sales of projectors. “Customers are entrenched, whether they’re DLP or LCD houses,” he explains. “They don’t have the time, resources or inclination to do the research. If they know an acronym, they’re going to stick with it.”

Buyers researching the technical differences between DLP and LCD projectors often encounter contradictory information. Both camps claim superior image reproduction, and both claim superior video playback. It takes a determined buyer to understand that both sides may be correct, because they’re talking about different aspects of the same thing. You might think that evaluating video playback would be straightforward, especially when referring to the constancy of the moving image, but even here, each camp has found differences that favor its own technology.

If you limit the discussion strictly to the pixel response rate, DLP would seem to have a strong advantage for video. “The switching time on DLP is measured in microseconds, so the ability for it to respond to an input signal is quite fast,” explains Frank Moizio, Texas Instruments’ strategic marketing/business development manager for DLP products. One of the latest advancements to the DLP chipset is DynamicBlack, which extends the already broad contrast range by interpolating more detail from the darkest areas. “If you wanted to do DynamicBlack, for example, and look at a scene within the 60 hertz, DLP could respond within that time interval on the next field,” Moizio explains. “Because you’re in milliseconds with LCD, it takes several fields to respond.”

Moizio compares this lag to the response time advantage of CRT monitors versus LCD monitors, which also have a difference that can be measured in microseconds versus milliseconds. “Some people say they can see this lag in a fast moving game or sporting event,” he says. “There’s a crispness and sharpness to the image because of this response time advantage.” Moizio makes a distinction between the response time of the video that’s delivered to the projector and the ability of the projector to display that video correctly. For example, we think of 1080p as having a faster refresh rate than 1080i, though a projector may not have the response time to present the subtle differences between progressive and interlaced video at that high a resolution. “Can you get the pixel information displayed for that particular moment in time?,” asks Moizio.

LCD proponents make their own case for superior video playback. They argue the DLP image has distracting artifacts that hinder the illusion of realistic motion. “In some of the single-chip DLP solutions, you’ll see fast motion, and you’ll see it break apart, because it can’t keep up,” says Aaron Marinari, a senior product manager with Epson America. “We don’t have that issue. With roadsides passing by very quickly in a video, you don’t get the separation with LCD, because everything is mixed at the projector level, instead of within the eye.”

Marinari points to DLP’s rainbow effect, where some viewers see brief flashes of color during sudden changes in content. Though less prevalent than it used to be, and only an issue with single-chip DLP systems, the rainbow effect is a result of the spinning color wheel. The LCD camp also argues that DLP’s intermittent colors make for a less steady image. “We have a quieter image,” explains Mark Holt, Sanyo’s vice president of sales and marketing for presentation technologies. “There’s no color wheel that causes artifacts in three-panel polysilicon versus single-chip DLP.” Newer DLP projectors attempt to mitigate these issues by speeding up the color wheel’s rotation. Marantz’s VP11S1 1080p single-chip DLP projector has a 6x-speed wheel that spins at a brisk 10,800 RPM.

Seeing Red
From the LCD side, you’ll often hear the claim that their imaging system produces more accurate colors. “Three-panel polysilcon, I believe, has more vibrant, warm colors-I’m talking about reds and oranges and yellows-as opposed to single-chip DLP,” says Holt. The DLP side has responded by expanding the number of color segments on the spinning wheel from three colors to six or more colors. Texas Instruments refers to this new enhancement as BrilliantColor. “It can expand the punchiness of the colors by making them more saturated and brighter,” says Moizio. “It’s all part of the design matrix that’s available to the manufacturers.” Recently introduced projectors with BrilliantColor include Mitsubishi’s WD2000U with a WXGA (1280×768) resolution and Dell’s 2400MP with an XGA (1024×768) resolution.

A problem for either side touting color fidelity is the lack of a color-quality metric for guiding potential buyers. “Right now when you measure brightness via ANSI, it’s an all white measurement,” says Marinari. “Contrast is all white to all black, but where does that leave color in terms of your image quality?”

With contrast defined as the dynamic range from the darkest area to the lightest area of the image, DLP is the clear winner. BenQ’s PE8720 DLP projector combines the DarkChip3 chipset with an eight-segment color wheel to achieve a 10000:1 contrast ratio.

By the end of this year, we’ll likely see DLP projectors incorporating DynamicBlack to reach an effective 20000:1 contrast ratio whenever it’s needed. “In the darker scenes, DynamicBlack kicks in,” says Moizio. “In the lighter scenes, you default to the native contrast ratio of the system.”
DLP also has an advantage with the fill factor or aperture ratio, which is commonly referred to as the screen-door effect. It’s the gap between the pixels that becomes especially obvious as you move closer to the screen. “In the case of DLP, there is anywhere from a 90- to 95-percent fill factor,” explains Moizio. “Where LCD is probably around a 60-percent fill factor. With some of our dark-chip higher-contrast-ratio DLP, the gap is only about 5 percent.”
In their favor, LCD projectors have a superior brightness-to-price ratio. “You have more brightness per dollar spent, or at least more possible brightness,” says Holt. “There are 5,500 lumen single-lamp polysilicon projectors, and the majority of the single-chip DLPs are in the 2,000- to 3,000-lumen range. We have a lot more choices in higher brightness.” High-brightness LCD projectors include NEC’s single-lamp NP2000 with 4,000 ANSI lumens, Canon’s single-lamp LV-7565 with 5,100 ANSI lumens, Epson’s single-lamp PowerLite 8300NL with 5,200 ANSI lumens, Sanyo’s dual-lamp PLC-EF60A with 5,800 ANSI lumens and Sanyo’s four-lamp PLC-XF45 with 10,000 ANSI lumens.
LCD projectors have remained strong in the corporate, government and educational markets because they often represent a better value when comparing models for brightness and resolution. “Right now, there is a $400 to $500 difference between LCD and DLP for similar brightness or optical format resolution,” explains Khatri. “LCD does provide some price advantage over DLP.”

Many projector buyers, however, are less concerned about the arcane differences between DLP and LCD. “End users for the most part are not so much technology driven as application driven,” says Holt. “If they can get the light output and resolution they need for their application, they’re apt to go either way.”

In addition to his reviews for this magazine, contributing editor David English evaluates software and hardware for CNET.com and Computer Shopper magazine.