The entire market for video, data, and graphics projectors in 1988 comprised of 30,847 units (table 1). Although Barco Projection Systems (BPS) only captured 14% of the aggregate total for projectors, for the corporate and industrial environments, BPS offered an unequaled level of quality in high end projectors due to the continuous improvements in scan rates and general performance compared to its peers.

BPS 35% video, 53% data, 12% graphics  total of 4,400 units (1,540 video units, 2,332 data units, 528 graphics units) 8% of entire market of video projectors (〖Total〗_video×.08=1,540→〖Total〗_video=19,250) 23% of entire market of data projectors (〖Total〗_data×.23=2,332→〖Total〗_data=10,139) 55% of entire market of graphics projectors (〖Total〗_graphics×.55=528→〖Total〗_graphics=960)

Sony 66% video, 34% data  total of 15,000 units (9,900 video units, 5,100 data units) 50% of entire market of video projectors (〖Total〗_video×.5=9,900→〖Total〗_video=19,800) 49% of entire market of data projectors (〖Total〗_data×.49=5,100→〖Total〗_data=10,408)

Electrohome 73% data, 27% graphics  total of 1,585 units (1157 data units, 428 graphics units) 11% of entire market of data projectors (〖Total〗_data×.11=1,157→〖Total〗_data=10,518) 44% of entire market of graphics projectors (〖Total〗_graphics×.44=428→〖Total〗_graphics=973)

(Total) ̅_video=(19,250+19,800)/2=19,525
(Total) ̅_data=(10,139+10,408+10,518)/3=10,355
(Total) ̅_graphics=(960+973)/2=967
〖Total〗_projectors=19,525+10,355+967=30,847

Table 1. Market size calculations. BPS entered into the video projector business with good results through its BarcoVision 1 in 1981. Even though end users purchased a new projector every five years, BPS continued to release new projectors at a steady rate over the next several years. Its executives also decided to shift the strategy of the company and entered into the market for computer applications. BPS’s next projector, the BarcoData 1, became the first computer-compatible projector in the marketplace in 1983, and was well received, especially in the corporate environment. The following year, the BarcoVision 2 and the BarcoData 2 were introduced, building on higher scan rates and broader compatibility. In 1987, BPS began selling the next evolution of its line of projectors. With its BarcoGraphics 400, the company had created the highest tier of performance and quality in projectors, which was thusly named graphics projectors. By 1989, BPS was heavily cemented in the data and graphics projector segments with its BD600 and BG400, respectively. Its next big release was called the BarcoData 7, and it was supposed to be the first digital data projector. Unfortunately, before the BD7 was released, Sony introduced the 1270 much to the dismay of the executive team at BPS. Upon examining the value map (fig. 1) of three of BPS’s projectors with one of Sony’s, the BV600, BD600 as well as the 1031 all seem to adhere to the same value equivalence line; the BG400, however, lies above. Since the BG400 was the most sophisticated projector in the entire market, BPS was able to charge that premium without consequence. Sony certainly is in an enviable position--not only due to having a more advanced projector but also due to being the sole supplier of the very tubes housed by their rival’s projectors. By extrapolating the value equivalence line using the data points for BV600, S1031, and BD600, Sony can charge a price of $17,314 for each unit of the 1270. Since Sony Projectors division only accounted for 1% of the total company’s revenue, a fee of $15,000 per unit of the 1270 would not drastically damage the company’s bottom line. If the goal was to capture BPS’s market share, this pricing scheme would be ideal, since BPS would not be able to sustain a price war. In the end, Sony can successfully target and secure the higher end graphics projector market and erode the dominance of BPS within that segment. As for BPS, it would be prudent to see how Sony progresses with the 1270 in terms of expected timelines, pricing, and customer response. Since BPS’s brand revolves around R&D strength and product quality versus the reliability and low-price label given to Sony Projectors, no rash actions should be taken for fear of supplanting the brand. For example, a preemptive price lowering of the BG400 would signal to the consumers that BPS believes their projector to be of lower value than that of Sony’s. At the very least, BPS can delay a price drop and withstand leaving profits on the table until after the smoke clears. Another reason for BPS to stay the course is because Sony Projectors does not have as robust of a dealer infrastructure to support the installation and subsequent service required of complex and advanced systems as BPS, evidenced by having 50% of box dealers. Since there were already orders for the BD700, production should proceed as scheduled. Because the BG700 would still be inferior to the 1270, development for the BG800, and a corresponding scanning frequency greater than that of the 1270, would certainly have to commence. If the 1270 starts taking market share away from the BD600 as well, BPS will just have to lower the prices on its entire product line and hope that their next generation BG800 releases sooner than expected. Furthermore, if the price drop is untenable, BPS must find a way to still incentivize consumers to purchase their system. For example, offering consumers trade-in value for old systems once the next generation projectors are released.