The number one household IQ tax? Why are projectors becoming less and less popular?

[Home Secret]French communication scholar J. Baudrillard once pointed out that consumption in modern society has actually become the consumption of the “meaning” contained in symbolic objects and symbolic services, that is, the consumption of material things has become the consumption of spiritual things. People buy certain goods or services not mainly for their practical value, but to find a certain “feeling”, experience a certain “artistic conception”, and pursue a certain “meaning”. I think the rise of projectors is mainly due to this kind of consumption.

Photo of the projector atmosphere (Source: Internet)

I believe that many friends who buy projectors have seen this kind of atmospheric photos: in a warm room, a TV is projected on a white wall, and the owner of the room curled up on the sofa, spending a lazy afternoon… This picture is very classic. Later, new ways to play with projectors emerged on the Internet, such as projecting a picture of a window or a window scene of rain on the wall, and standing in front of it to take an atmospheric movie. Although many people can see that it is an advertisement, there are also many people who will pay for such a scene.

In this year's “Double Eleven” event, projectors are selling much better than in the past. The head of a projector manufacturer said in an interview that in order to cope with the “Double Eleven” promotion, the factory has been operating at full capacity during this period. According to data from Aowei Cloud Network, my country's home smart projector market will maintain a high growth trend throughout 2022, with sales expected to reach 6.45 million units.

Competitiveness of projectors

In addition to the rapid growth in projector sales due to internet celebrity marketing, of course the projector itself also has many advantages.

Why are projectors so popular? First, it saves money, and you can watch widescreen movies at home. Under normal circumstances, two tickets for two people to go to the cinema together cost 80 yuan, which is still cheap. If you buy some snacks, it will be around 100 yuan. At present, projectors priced between 1,000 and 3,000 yuan can be found everywhere on the market, and you can even buy a projector for a few hundred yuan. If you watch a movie once a week, you can buy a small portable projector in about two months. Especially affected by the epidemic, application scenarios such as home entertainment, home office, and online classes have penetrated more into people's lives.

Projector sales surge

The second is convenience. It is easy to install and use. As long as there is a wall at home, there is no need to install a screen or connect various wires. It is very convenient. Especially for the high-mobility renting population, the burden of TV is too heavy. Due to the limited space, the projector can be taken away and can be projected on a wall.

The third reason is that the screen is bigger and does not hurt the eyes. Many consumers buy projectors because they think that projectors are less harmful to the eyes than watching a flat screen directly. And because the screen is big, it is also suitable for watching with family and friends.

The popularity of projectors has directly driven the growth of related companies. Tianyancha data shows that there are currently more than 70,000 projector-related companies in my country. In terms of establishment time, more than 60% of projector-related companies were established within 5 years. Among them, the number of newly registered projector-related companies in 2021 was the largest, with a growth rate of 62.69%.

Projector Problems Emerge

Projectors can provide both a sense of atmosphere and practicality; they can create convenience for people who rent houses and provide an additional option for people who own houses. Therefore, projectors are on the cusp of hot sales. According to data from Luotu Technology, in 2022, sales in China's smart projection market increased by more than 20% year-on-year for three consecutive quarters, and the cumulative sales in the first three quarters reached 4.29 million units.

But behind the hot sales, problems with projectors continue to emerge. Problems such as unstable projector quality, limited profit margins, embarrassing high-end situations, and instability of leading enterprises need to be solved urgently.

Projector (Photo source: Internet)

A user reported that the projector she bought for more than 1,000 yuan in 2018 had problems last year. When projecting, there were some dense white dots on the screen. Later, the projector's Bluetooth connection became unstable. When she was ready to repair it, she found that the store had closed down and the brand was nowhere to be found.

This is not an accidental phenomenon. Many consumers have found that the life of a home micro projector does not exceed its warranty period, and basically “cannot last more than three years.” There are all kinds of problems, such as not being able to connect to Bluetooth, no sound, overheating and freezing, etc. Moreover, even if it can exceed the warranty period, the cost of repair is not low.

It is reported that according to the current market situation, if there is a problem with the motherboard, the repair price is about 400 yuan. If the DMD chip is broken, the repair cost may even be thousands.

Moreover, unlike TV, projectors also have the problem of clarity. One user said that the projector he bought has 250 ANSI lumens, but “except for cloudy days, it is basically still unclear during the day.” This is quite different from the “atmosphere anywhere” that many people imagined at the beginning.

In addition, the atmosphere is affected by fan noise and focusing problems. Some users said that when the position is moved or someone walks in front of the projector, the picture may need to be refocused.

There are products with higher lumens and better stability on the market, but they cost three to five thousand or even tens of thousands. And even if you spend a high price, the effect may not be as expected.

Can you still make money from projectors?

At present, the export volume of projectors is still growing rapidly and brands are continuing to make efforts, but some industry insiders believe that “projectors are about to enter the stock market stage.”

According to the “China Projector Market Tracking Report for the Fourth Quarter of 2021” released by IDC, the total shipments of the Chinese projector market in 2021 were 4.7 million units, a year-on-year increase of 12.6%. Sales exceeded RMB 21.4 trillion, a year-on-year increase of 15.5%. XGIMI, Epson, JMGO, Fengmi, and Dangbei are the top five projector manufacturers.

Shipment volume of the top 5 manufacturers in China’s projector market in 2021

Among them, XGIMI Technology ranked first in the domestic projector market with a 21.2% annual shipment share, and the market share of a single brand far exceeded the sum of the second to fourth place. From 2018 to the present, XGIMI Technology has ranked first in the Chinese projection equipment market in terms of shipments for four consecutive years, firmly sitting in the leading position in the domestic projection industry.

However, the 2022 interim report of Xgimi Technology shows that the operating income in the first half of the year was 2.036 billion yuan, a year-on-year increase of 20.72%, which was mainly due to the increase in product sales and the increase in the average unit price of products. Although it is still growing, Xgimi's revenue growth rate has shown signs of slowing down. In the second three quarters of 2020, Xgimi's revenue once maintained a growth rate of between 32% and 62%, while the year-on-year growth rate of revenue in the first two quarters of this year dropped to 24% and 17%.

As XGIMI mentioned in its financial report, its product prices have increased, and other brands also have a trend of raising prices and moving towards high-end. However, industry insiders said that judging from the current attempts of various companies, projectors will face the embarrassing situation of hitting TVs upwards and being unable to iterate downwards and form barriers if they try to move to the high-end market.

Projectors are not a highly profitable industry, and the upward price trend is also based on profit considerations. Industry insiders revealed that the R&D cost and material cost of projectors are relatively high, so the overall profit margin of the industry is average.

There is a strong competition between projectors and TVs. The clarity of a projector of around 1,000 yuan is far inferior to that of a TV. If you want to pursue higher clarity, the price will be raised to 4,000 to 5,000 yuan, which is about the same price as a mid-to-high-end TV. In terms of home decoration, the competitive advantage of projectors is not as good as that of TVs, because in addition to being able to watch, TVs can also be regarded as decorative items, while projectors have lost their halo in this regard.

On the upside, the TV will be a strong competitor. On the downside, not only will the profit margin be low, but there will also be competitors with more price advantages. It seems that if the projector wants to gain a more stable position in the industry, it needs to make another breakthrough.

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