This article examines the development of pico-projector technology and the possible market opportunities for this exciting new technology.

by Chris Chinnock

INTEREST in low-lumen projectors has been building for the past few years and has been at a high level of activity for about the past year and a half. Sometimes called pico projectors, nano projectors, or pocket projectors, these products all feature light-emitting- diode (LED) or laser illumination and offer a lower light level compared to that of conventional lamp-based projectors. However, the primary attractiveness of these projectors is their small size and fairly low cost, plus the new-use models that developers envision for them. If all goes as planned in terms of product development and rollout, there is potential to sell millions of these projectors in the next few years – an amount that could outstrip today's entire established projection market.

However, success is far from guaranteed, as there remain a number of issues in this nascent market, among the most crucial of which is acceptance by end users.

Low-Lumen Projectors 2.0

Remember, the first pocket projectors arrived at the end of 2005, and during the next 2 years, two generations of products were introduced. The first-generation projectors offered no more than 25 lm, while the second-generation devices reached about 50 lm. They were modest-sized products selling for $700–900 and were marketed mainly to business users as a notebook accessory. They did not sell very well, however, prompting many to drop out of the market.

What was the problem? Simply put, the value proposition was not very good. The price was simply too high for the light output level and image quality for the intended applications. In most business scenarios calling for these projectors, such as sharing information in small-meeting environments, the room lights will be on (at least dimly), which would probably require a minimum of 100 lum to create a usable image in the 20–30-in. range; the room would need to be much dimmer for a 50-lm projector to generate a viewable image of this size image or the image would have to be considerably smaller. This is feasible, of course, but the market did not find this attractive for an $800 projector.

In the so-called pico-projector class, which we define as under 50 lm, a new generation of prod-ucts is now coming to market. Why will it be different this time around? There are a number of reasons, but it boils down to an improved value proposition. These projectors will be much smaller, more efficient, and much less expensive (more on this below), enabling them to be used as accessories to a variety of portable products, with embedded versions to follow. Plus, the roadmap for their price/performance evolution over the next few years shows that this value proposition will improve significantly.

The big unknown, however, remains the acceptance of the end user to these products, which in turn depends on both the end-user use model and the price/performance of the devices. We forecast users will find these products compelling, but no one will really know until there is enough sales history with these new products to get beyond the "cool gadget" phase.

As the other articles in this issue detail, there are lots of ways to create pico projectors, as detailed in Table 1.

Clearly, developers have many options to consider, with each approach offering advantages and disadvantages. We have analyzed these approaches in some detail and have characterized their strengths and weaknesses, but a detailed discussion is beyond the scope of this article. The bottom line is that for embedded applications, small size, low power, and low cost are critical, so we think the scanned mirror approaches and the small LCoS approach (see Fig. 1) offers the best solutions.

Fig. 1: Syndiant's pico projection core is tiny.

For companion projectors, power efficiency, compact size, higher lumens, and moderate cost should be most critical. Here, the playing field is more difficult to handicap. In the short term, companion projectors with color-filter LCoS and HVGA DLP will enter the market first. But as LED and laser sources improve in the next few years, almost all of the solutions can potentially compete. Success will more likely be determined by finding the right mix of price, performance, size, power, and features that are tailored for specific-use models. Low power consumption will be particularly necessary because this will help differentiate these projection products from their bigger much-higher-lumen cousins using lamp-based technology.

In addition, having a strong brand to push the product will be critical – a companion projector that is offered by Dell or HP, for example, will have a better chance of success than a product sold by a third-tier Chinese electronics company. Conversely, even a good product that does not have enough marketing and brand support can fail in the market. Developers need to carefully evaluate failures to understand the root cause because it may not be price/performance.

Forecasting the Opportunity

Developing a forecast for a tiny or non-existent market is never easy. To undertake this task, Insight Media first started with a solid engineering analysis of the capabilities of each approach and the prospects for improvement of the imagers, LEDs, and lasers that will drive them. We then developed a cost-throughput model to estimate the light output, power efficiency, bill-of-material costs (BOMs), and other factors. This was used to generate an overall average selling price for embedded (integrated) pico-projector modules and stand-alone companion pico projectors. Table 2 shows the results of this analysis.

We next developed a worldwide estimate of the total available market (TAM) for these two classes of projector. This consisted of game consoles, laptops, ultramobile PCs/mobile Internet devices, cameras, handheld games, portable media players, and cellular phones/PDAs. For each of these categories, we created a forecast for their sales through 2012. This is the TAM.

To estimate sales into this TAM, we looked at several penetration examples including the "average" consumer-electronic product, cameras into cellular phones, MP3 players, etc. Each of these shows a different rate of growth, leveling off at different values. In our analysis, we tried to select the best curve for the market segment we were evaluating, making adjustments to the slope and saturation point based upon differences in the two products. This is clearly a qualitative assessment, but if the details of the assumptions are made clear, the reader can independently judge the validity of the assessment.

To build the forecast, we analyzed each of the above market segments for embedded and stand-alone (companion) products, adjusting the total as embedded products began to cannibalize companion product sales in the out years. In addition, we created three forecast scenarios: conservative, expected, and optimistic. In general, the conservative forecast delayed the ramp in penetration by about a year, and the optimistic adopted a more aggressive penetration curve. This was done to show the potential range of outcomes.

Figure 2 shows the unit sales forecast for integrated and companion pico projectors in the expected scenario. In the optimistic scenario, sales in 2012 could balloon to 41 million integrated projectors and 46 million companion projectors, whereas in the conservative scenario, sales of integrated projectors reach only 4 million units while companion projectors reach nearly 11 million units.

This broad range in possible outcomes is due to the newness of the category, the new target audience (consumers), and the big unknown – consumer acceptance of these products.

On the other hand, time is on the side of the pico-projector developers. In a few years, the price-performance of these products will improve considerably, creating a different value proposition for the end user. Therefore, part of the dilemma for developers is timing. Enter the market too early and you may launch a dud; enter too late and you have lost the leadership role to another company.

But one thing is clear. The potential for this product category is huge, which is why there is such a high level of interest. Is it fair to characterize it as a gold rush? Will the value propositions be sufficiently different this time around to generate real sales volumes? We will see soon enough. •

Fig. 2: Composite expected unit sales of pico projectors.