China's Projector Shipment Growth Slows In 1Q08

According to CCID Consulting, China's projector shipments have been growing rapidly since 2001, from 61 thousand to 649 thousand in 2007 at revenues of 8.58 billion Yuan. 2007 shipments were up 33.5% and revenues 30.0% over 2006.

However, in 1Q 2008, shipments were at 106.6 thousand and revenues 1.4 billion Yuan, up 13.0% and 12.7% YOY respectively. The significant drop in growth rates over previous cycles suggest a China projector market that is beginning to mature. Chinese users are getting more selective with more commoditized technologies, lower product prices, and increased vendor competition.

China's education and government purchase growth had already peaked, but education maintained its steady development, taking almost half of all purchases. The enterprise segments were still a mainstay, but small and medium enterprise (SME) growth was also steady given lower projector price points. Lower price points, along home entertainment applications, will give the consumer segment interesting growth potential.

Sector	1Q08 Shipment Share
Education	47.9%
SME	19.6%
Government	18.9%
Larger Enterprise	9.2%
Consumer	4.4%
Total	100%

The top five vendors in 1Q08 were Toshiba, Epson, BenQ, Sony and Hitachi, in terms of shipments. Toshiba performed strongly in 2007, overtaking former leader Epson. Hitachi has had a more industry and education focus, surpassing InFocus and Panasonic to achieve fifth place. BenQ won an important education project, while major vendors, such as Sony and BenQ, launched consumer-targeted high definition projectors.

Projector Vendor		1Q08 Shipment Share
1	Tohsiba	13.3%
2	Epson	12.8%
3	BenQ	8.6%
4	Sony	8.5%
5	Hitachi	8.4%
6	NEC	7.3%
7	Panasonic	6.3%
8	InFocus	5.6%
9	Sharp	5.6%
10	Sanyo	5.3%
11	Others	18.3%
	Total	100.0%

While each vendor will face its own unique opportunities and challenges, CCID Consulting believes all vendors should consider the following factors in their China strategies.

Competition can no longer be on price alone. CCID Consulting statistics show the average projector price in China has been declining, but the decline has slowed. In 2007, the average projector price was 13,220 Yuan, down by only 2.7% over 2006. Vendors are reaching a threshold by which further significant price drops will hurt their longer term profitability and viability.

Differentiate with superior post-sales service and support. Only trained technicians should be able to effectively service product and provide maintenance. Vendors have an opportunity to differentiate based on how good their post-sales services are, and how well they organize to better support their products. Moreover, as projectors enter the consumer market, offering custom services becomes even more important.

Optimize and build channels effectively. Finally, channels are an all-important aspect to product sales and support, as vendors will adopt differing channel strategies based on their market positioning. Please see below.

Sectors such as government financial services, logistics, and communications have adopted multimedia /audiovisual training and conferencing systems, which in turn drive high-end projector adoption.

Vendors such as NEC, Toshiba and Mitsubishi have been developing China's high-end market since 2006 and actively launched new products. In 2008, vendors such as Barco and DP were focused on improving their high-end product channels and associated service quality. DP signed three regional agents across China: Beijing Hengan Company Limited, SMI, and Zhejiang Mintong Technology. Barco reorganized their distribution network and signed on as "golden agent" Beijing Founder Century Information System Company.

Please contact us for these and other China-related data, information and products.

Unless otherwise specified, all information provided is sourced from CCID Consulting.