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post #1 of 114 Old 12-20-2009, 11:32 AM - Thread Starter
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We saw a brief acceleration of prices drop a few years ago but that has slowed.

I'm sure nobody thought in 2005 we would see 1080p video cameras all over the place that are under $600. Yet today we are still seeing 1080p projectors for thousands of dollars.

There is not much to projectors and I think prices could go much lower. Is it time for stripped down models and substantially lower prices?
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post #2 of 114 Old 12-20-2009, 11:35 AM
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Stripped down to what from what? There are already 1080p proectors selling for $999.

Absence of evidence is not evidence of absence

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post #3 of 114 Old 12-20-2009, 12:24 PM
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I think this is a typical example of the greed that is driving manufacturing to cheaper developing countries (along with our jobs). Why does the public think they have a God given right to paying less and less each year for goods? We all want cheaper and cheaper goods, but there comes a point where they can't be made any cheaper without seriously cutting corners on quality, durability or paying the workers that make them. Every stage in the manufacturer to dealer process has to make some money otherwise there is no point in them being in business, so cuts have to be made somewhere. Then you'll be on here moaning that this projector has poor convergance, or some such and what a terrible product this is and what an awful manufacturer they are.

When there are no jobs left in manufacturing in the USA (and UK in my case)and we are buying disposable projectors (and other similar goods) that only just last out their warranty, then we only have ourselves to blame IMHO.

I think if you can afford such a luxury (and unessential) hobby as Home Theatre, then you have to accept just putting your hand in your pocket.

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post #4 of 114 Old 12-20-2009, 12:52 PM
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Quote:
Originally Posted by Tryg View Post

We saw a brief acceleration of prices drop a few years ago but that has slowed.

I'm sure nobody thought in 2005 we would see 1080p video cameras all over the place that are under $600. Yet today we are still seeing 1080p projectors for thousands of dollars.

There is not much to projectors and I think prices could go much lower. Is it time for stripped down models and substantially lower prices?

Look at you stirring the pot

As has been pointed out, for those who want cheap, we now have 1080p units for under $1K. For those who want performance, what's available under $10K is truly amazing and would have wowed anyone 5 years ago. Sure, you can't get a Lumis for $500 yet, but until some major technological and manufacturing revolutions happen, we simply don't have the technology to cheaply manufacture electronics and optics of that quality.

There will always be something newer/better the horizon, and as Alan pointed out some time ago, the day we have 1/8" thick roll-on screens with infinite on/off and ANSI CR, 16K resolution, 100% MTF, 5K calibrated lumens, perfect convergence, etc., some of the excitement of the hobby will certainly die. Until then, there seems to be something to make everyone happy at any price. I for one am not complaining as I'm eagerly awaiting my RS35 (upgrading from an FPJ1) to arrive on Christmas Eve!

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post #5 of 114 Old 12-20-2009, 12:53 PM
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Less expensive is more along the line of my thinking...I don't want cheap. However, I think price drops are good, because they open lines to all income levels and for those that want "well built" machines.... that's why companies have different lines. Supply and demand...companies are not in the business to develop for higher end customers only and those that get the message...they will employ and grow.


I'm happy to see what panasonic, epson, and sanyo have done in the area of price drops. They brought out products that look good and are in the range of a more buying public. As to the higher end companies...I think they will profit as well. It's a win for all and soon we will see media follow in price drops as well.

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post #6 of 114 Old 12-20-2009, 01:20 PM
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I wonder if that forthcoming $1200 VideoEq Pro CMS box that AV Foundry is releasing will help push CMS into lower end projectors?

At the low end of the market I'm sure we'll see prices continue to decline but I think new technologies (such as LED lighting and 3D) will help mfgrs keep their high end prices high for awhile longer.

And yes, less expensive is good, cheap is bad.

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post #7 of 114 Old 12-20-2009, 01:29 PM
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Quote:


There is not much to projectors and I think prices could go much lower.

For a little perspective, ask a professional photographer how much he would expect to pay for just a zoom lens to take pictures that would potentially be blown up to 12 feet wide, with excellent corner to corner focus, uniformity, and free of chromatic aberration.
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post #8 of 114 Old 12-20-2009, 01:29 PM
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Supply...Demand...Technological Efficiency -- these are the only variables. Prices "come down" as and when one or more of these elements increases.
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post #9 of 114 Old 12-20-2009, 01:57 PM
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I never understood why supply was first...who makes a bunch of product hoping for demand. I think as people get off their high horse about how big and how great their setups are and start introducing HT to friends without childishly bragging we will see demand which equate to supply and price wars. When friends watch a movie in my theater I don't brag about my isco 3L Lens, I talk about how I saved money going DIY. TEACH...DON'T PREACH.

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post #10 of 114 Old 12-20-2009, 01:57 PM
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what needs to come down is the price of replacement bulbs--projector prices have plummeted in the last six years, bulbs have not budget much at all.
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post #11 of 114 Old 12-20-2009, 02:03 PM
 
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The issue isn't "cheap" versus "quality", but rather how much profit is reasonable for a given projector. Case in point, I recently bought a Viewsonic Pro8100. A few years ago this pj was listed at $4995 (notice I didn't say selling for!), but I bought mine new for $1299. Guess what, Viewsonic STILL made a profit! Consumer electronics have crazy markups, but over time the manufacturers lower their margins to move more product. My first JVC "progressive scan" DVD player cost $399, and today I saw a Pioneer Bluray player advertised for $99! I like the way electronics get less expensive after a short time on the market, last years models are always a bargain. Still, it makes you wonder just how much profit is added on to something like a $40K Lumis projector. I don't want to single them out, but I'm thinking at least $35K worth!
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post #12 of 114 Old 12-20-2009, 02:25 PM
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Quote:
Originally Posted by Tryg View Post

We saw a brief acceleration of prices drop a few years ago but that has slowed.

I'm sure nobody thought in 2005 we would see 1080p video cameras all over the place that are under $600. Yet today we are still seeing 1080p projectors for thousands of dollars.

We are also seeing 1080p projectors for under a grand, like was already stated.

The exact same thing happened with 720p machines about 4 years ago. That's when I got into the hobby. Prices plummeted on 720p machines by about half in a short span of time. Of course there were still some "high end" 720p machines around at the time.

But you're right it was different then, and you know what that difference was? 1080p. Yup, it was 1080p, the reason we didn't see a similar situation with 720p, that of having 720p machines ranging from $1000 to $10,000+ was because when the prices plummeted on 720p machines, the high end manufacturers (and OEMs) as well as the high end purchasers thew all their energy behind 1080p machines.

So what happened was 720p machines just disappeared in all but the budget sector because nobody willing to spend more wanted to "settle" for 720p.

Things are different now because unlike 720p, 1080p isn't really a stepping stone. Yes 4k is out there, but since there's no content, there's no big push to bring that home.

So we're left with what we see today, a very diverse 1080p marketplace. The "low end" is very strong with 1080p HT machines starting at under a grand, and an huge collection of models available under $3k.

But we also see that since there's not a new "destination" spec out there, the high end is also sticking with 1080p resolution machines.

I don't really see a problem.

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There is not much to projectors and I think prices could go much lower.

Lower than what? $1000?

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Is it time for stripped down models and substantially lower prices?

Isn't that what the $1k models are? How much cheaper do you think they should be? Really?

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Originally Posted by tbase1 View Post

I never understood why supply was first...who makes a bunch of product hoping for demand.

The phrase is "supply and demand" not supply 'then' demand. The whole idea is that the market consists of two curves, a supply curve and a demand curve. That as price goes up, more people will be inclined to create supply, but conversely as price goes down, more people will create demand.

Theory goes there's a point at which these two curves cross and that's the price and the amount of supply the market will support.

It's got nothing to do with the "build it and they will come" that you seem to think it means.

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I think as people get off their high horse about how big and how great their setups are and start introducing HT to friends without childishly bragging we will see demand which equate to supply and price wars.

What makes you think anyone does that? I mean really? If you're judging by the discussion and opinions on this forum, I think you're taking things out of context. On the forums we're here to discuss with other enthusiasts the hobby. And in this area of the forum, generally we're looking for and discussing high performance products and we give our opinions about them.

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When friends watch a movie in my theater I don't brag about my isco 3L Lens, I talk about how I saved money going DIY.

I don't even do that, I just let my system speak for itself, and I field any questions that happen to come up (usually the "what's that thing in front of your projector for?" type questions )

I do of course share my excitement with my friends, fill them in when I got something new, but that's just how things work.

See what an anamorphoscopic lens can do, see movies the way they were meant to be seen
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post #13 of 114 Old 12-20-2009, 02:40 PM
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Originally Posted by floridapoolboy View Post

Still, it makes you wonder just how much profit is added on to something like a $40K Lumis projector. I don't want to single them out, but I'm thinking at least $35K worth!

Are you counting paying for research and development as "profit"? There are many companies where people would say their profit is high on what they sell, yet the companies are losing money most quarters.

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post #14 of 114 Old 12-20-2009, 02:46 PM
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Quote:
Originally Posted by Pedro2 View Post

what needs to come down is the price of replacement bulbs--projector prices have plummeted in the last six years, bulbs have not budget much at all.

The problem is lamps aren't like silicon, silicon manufacturing prices plummet each year, while things like precision optics don't.

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Originally Posted by floridapoolboy View Post

The issue isn't "cheap" versus "quality", but rather how much profit is reasonable for a given projector. Case in point, I recently bought a Viewsonic Pro8100. A few years ago this pj was listed at $4995 (notice I didn't say selling for!), but I bought mine new for $1299. Guess what, Viewsonic STILL made a profit! Consumer electronics have crazy markups, but over time the manufacturers lower their margins to move more product. My first JVC "progressive scan" DVD player cost $399, and today I saw a Pioneer Bluray player advertised for $99!

It's not quite that simple. The big driving force in electronics getting cheaper is that manufacturing processes change each year, as does technology and it gets cheaper and cheaper to manufacture the parts. Game consoles are the perfect example. They're sold at a loss when they're released, but they're still expensive. But by the end of their life, the cost to build that machine has dropped to the point that even at 1/4 the price it originally sold for (where it was losing money) the hardware is profitable.

The other big issue is R&D, it's not free to develop a projector, it takes money, lots of money. And the way you recoup that money is you charge a lot more than the parts cost. But after a few years you've recouped that R&D and you can reduce the price to much closer to the parts cost.

Add all that up, the "paying off" the R&D "loan" and the drastic reduction in manufacturing cost and you can sell for a lot less and still make money.

Of course there's another thing that happens and we've seen it best illustrated recently by Pioneer's exit from the Plasma market. At the end of that, they were selling for incredible prices because they were just trying to move surplus stock.

But of course none of this means high prices at release are "exhortation", or just the result of greedy, money grubbing companies.

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I like the way electronics get less expensive after a short time on the market, last years models are always a bargain. Still, it makes you wonder just how much profit is added on to something like a $40K Lumis projector. I don't want to single them out, but I'm thinking at least $35K worth!

R&D is probably most of the cost of the Lumis if I had to guess. I mean parts cost will be more than a cheap machine, but not 10x, I'd bet the majority of the price premium is the cost of the R&D for a machine that, due to the higher parts cost, will sell in very low numbers (compared to something like a Optoma).

Look at it this way, lets say (just for arguments sake) that the Lumis parts cost is 3x that of the Planar 8150, and that it's parts cost is $5000 (pulling numbers from my... of course). That means the Lumis' parts cost would be $15,000.

Now Lumis is much more complicated, both in hardware and software, so maybe R&D is also 3x as much. Lets for arguments sake say the Planar cost $2,000,000 to develop.

Now continuing this thought experiment, lets say Planar figured they could sell 1,000 8150's per year and they wanted to pay off the R&D in two, and make $1000 profit per machine. So $2,000,000/(1000 * 2 years) = $1000/machine to cover R&D so we've got:
$5000 parts + $1000 R&D + $1000 profit = $7000 selling price.

But what about the Lumis, we're assuming 3x the R&D cost, so $6,000,000, but lets say Sim only thinks they'll sell 100 machines per year, since the higher parts cost will put them in a much more exclusive market. So that would mean they'd need to add $6,000,000/(100 * 2 years ) = $30,000 / machine to "pay off" the R&D cost.

So right there we're $15,000 parts + $30,000 R&D = $45,000 just to cover the cost of developing and building the machine, and that's no profit. Even if we assume equal R&D cost between the two, that's still $10,000/machine to cover the R&D so that still puts the cost to make a Lumis at $25,000.

Obviously none of these numbers are right, for either machine, but it goes to show that even if a high end machine doesn't cost a lot more parts wise, the simple fact that it's "high end" and thus sells less units means the cost to produce each unit is much higher.

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post #15 of 114 Old 12-20-2009, 02:46 PM
 
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Originally Posted by darinp2 View Post

Are you counting paying for research and development as "profit"? There are many companies where people would say their profit is high on what they sell, yet the companies are losing money most quarters.

--Darin

I'm discussing projectors and projector companies, R and D is not that significant. Most components are outsourced, like LCD and DLP light engines, lens assemblies, bulbs, processing circuitry, etc. I realize that companies will charge what the market will bear, and that the high end offers exclusivity along with increased performance. It's difficult to see, however, how one pj can cost 10 times as much as another, even with higher end parts.
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post #16 of 114 Old 12-20-2009, 02:52 PM
 
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Research and development costs are really only significant for the first of its kind product, after that its just variations on the theme. The costs associated with projectors should be fairly consistent across product lines. I'm sure Panasonic researched and developed their 4000 with as much effort as Lumis did with their machine, so we're really only talking about the cost of materials.
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post #17 of 114 Old 12-20-2009, 02:57 PM
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Originally Posted by stanger89 View Post

I don't even do that, I just let my system speak for itself, and I field any questions that happen to come up (usually the "what's that thing in front of your projector for?" type questions )

I do of course share my excitement with my friends, fill them in when I got something new, but that's just how things work.

I try to avoid discussing price with friends and family as I don't know anyone else (outside of these forums) that has a projector let alone a lens or a VP. I'm sure they'd think I was bonkers for spending what I have even on a modest (by these forum's standards) and partly secondhand setup. However, those that have seen it seem to have been impressed, but I bought it for me and my OH to enjoy, which we do.

I just think that while there has historically been a reduction in price for items with a greater performance than previous models, we shouldn't take it for granted.

I get the feeling that this thread was started just as a bit of a troll, given the lack of response to any of the comments.....I'm sure if I posted that I think the HP screen is a pile of pants then Tryg would be jumping up and down to say how wrong I was.

BTW, I have a Matt White screen as I can't stand hotspoting.

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post #18 of 114 Old 12-20-2009, 03:38 PM
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Originally Posted by floridapoolboy View Post

Still, it makes you wonder just how much profit is added on to something like a $40K Lumis projector. I don't want to single them out, but I'm thinking at least $35K worth!

If you truly believe this, you should probably get into the projector business and make a Lumis clone and sell it for half price. You'll steal the market and still make some killer money.

Plus then people like Tryg could buy a real projector and couple it with a real screen

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post #19 of 114 Old 12-20-2009, 03:44 PM
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plus then people like tryg could buy a real projector and couple it with a real screen


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post #20 of 114 Old 12-20-2009, 03:55 PM
 
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Originally Posted by HogPilot View Post

If you truly believe this, you should probably get into the projector business and make a Lumis clone and sell it for half price. You'll steal the market and still make some killer money.

Plus then people like Tryg could buy a real projector and couple it with a real screen


Many business models are based on just what you suggest. The problem is, even at 1/2 price the Lumis "clone" would still be so expensive as to have too limited a market. If I could hit the $3K price point every projector enthusiast would want one, but that would still only amount to maybe what, one percent of the people who buy televisions?
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post #21 of 114 Old 12-20-2009, 04:17 PM
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Originally Posted by floridapoolboy View Post

Many business models are based on just what you suggest. The problem is, even at 1/2 price the Lumis "clone" would still be so expensive as to have too limited a market. If I could hit the $3K price point every projector enthusiast would want one, but that would still only amount to maybe what, one percent of the people who buy televisions?

What's so magical about the $3,000 price point? Is it based on market research yielding a target demographic, or are you just pulling a number out of your rear?

My original assertion was meant to be facetious since the $35K profit margin you claimed is 100% pure manure. Making wild claims about the nature of the projector market to make things appear as you'd like them doesn't make it so.

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post #22 of 114 Old 12-20-2009, 04:34 PM
 
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Originally Posted by HogPilot View Post

What's so magical about the $3,000 price point? Is it based on market research yielding a target demographic, or are you just pulling a number out of your rear?

My original assertion was meant to be facetious since the $35K profit margin you claimed is 100% pure manure. Making wild claims about the nature of the projector market to make things appear as you'd like them doesn't make it so.

I've been around the consumer electronics business for quite awhile, and I'm well aware of the tremendous markups in many product lines. While I may be pulling numbers out of the air (not sure about you, but I have no numbers in my rear!) it's obvious that no where near $40k is involved in making a Lumis pj. The high end in ANY business consists of huge profits per unit, due to limited sales of such items. One of my other hobbies is motorcycles, I've owned a number of bikes, mostly Harley. The so-called custom chopper business was comparable to high end pjs, with certain "Master Builders" commanding outrageous prices, $100,000 or higher for a bike. Adding up the cost of the parts, and throwing in a nice paint job, it was still hard to run the bill of materials much over $15k. The rest was pure profit, not a bad return on investment. Just an example, but whatever, the $40k pj is akin to a $40k pair of speakers, tough to justify on parts or R&D alone. When the Lumis (or ANY high dollar current pj) is old news and is being cleared out for pennies on the dollar they will still be making a profit, that's life in the big city!
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post #23 of 114 Old 12-20-2009, 05:25 PM
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Originally Posted by floridapoolboy View Post

I've been around the consumer electronics business for quite awhile, and I'm well aware of the tremendous markups in many product lines. While I may be pulling numbers out of the air (not sure about you, but I have no numbers in my rear!) it's obvious that no where near $40k is involved in making a Lumis pj. The high end in ANY business consists of huge profits per unit, due to limited sales of such items. One of my other hobbies is motorcycles, I've owned a number of bikes, mostly Harley. The so-called custom chopper business was comparable to high end pjs, with certain "Master Builders" commanding outrageous prices, $100,000 or higher for a bike. Adding up the cost of the parts, and throwing in a nice paint job, it was still hard to run the bill of materials much over $15k. The rest was pure profit, not a bad return on investment. Just an example, but whatever, the $40k pj is akin to a $40k pair of speakers, tough to justify on parts or R&D alone. When the Lumis (or ANY high dollar current pj) is old news and is being cleared out for pennies on the dollar they will still be making a profit, that's life in the big city!

Okay, so you don't have any concrete numbers to share?

It's no big secret that low volume, high-end items like the projectors in the $20K+ realm have to carry higher profit margins in order to make the company's business model viable and profitable. Companies like Sim2, DPI, Christie, ProjectionDesign, Barco, etc charge what they charge for several reasons - their business model must be self-sustaining, they can because the market pressures have established an equilibrium price for their products, and yes, they actually want to make money.

Any of the more experienced people here could go on and on about the expense of developing a light engine, paying for highly graded DMDs, the cost of high quality optics, and paying the people with the know-how to design and assemble all this stuff. I'm confident that if someone else can do the same thing for less, it will happen - as you said, the digital projector market is relatively small, and has plenty of room for healthy competition.

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post #24 of 114 Old 12-20-2009, 05:27 PM
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According to Tryg, now that could be the name of a top selling book,there is only one screen material. The rest are invalid choices.

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post #25 of 114 Old 12-20-2009, 05:49 PM
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Originally Posted by floridapoolboy View Post

I'm discussing projectors and projector companies, R and D is not that significant.

We were discussing the Lumis and I don't think the reasons you have come up with that R&D isn't significant hold.
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Originally Posted by floridapoolboy View Post

It's difficult to see, however, how one pj can cost 10 times as much as another, even with higher end parts.

I realize it is difficult for you to see, but I think you are missing some basic logic in this line of thought. For instance:
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Originally Posted by floridapoolboy View Post

The costs associated with projectors should be fairly consistent across product lines. I'm sure Panasonic researched and developed their 4000 with as much effort as Lumis did with their machine, so we're really only talking about the cost of materials.

That doesn't even make sense. If the AE4000 took the same amount of effort ($) as the Lumis to develop then the Lumis has way more R&D per unit because the unit sales are minuscule compared to the AE4000's. The AE4000 could have taken more $ to develop and the Lumis price could still have a large amount of R&D cost in it per unit.

And it isn't just R&D, there are other costs to run a company. I just used R&D as an example. Trying making a product with low volume and see how much "profit" you have to put in each one just to break even, let alone actually turn a profit as a company.

There are many factors that go into pricing. For instance, in general the highest priced units also require the higher margins in order to get dealers to sell your product. There is normally more hands on, keeping a high end store, etc. Projectorpeople can run their business by selling lots of AE4000s even at lower margins over the internet. But that is not normally how things work with the highest priced stuff.

And the difference between a cheap lens and an expensive lens can be significant. Not even counting that TI wants their share for high end units. They do develop the chips and I think there is a good chance their DLP group isn't profitable, despite having lots of profit in every Lumis by your definition. Based on the last numbers I heard I'm guessing that SIM2 pays more just for the 3 DMD chips in the Lumis than I can buy an AE4000 for at retail.

I recall when a guy my dad worked with was upset because TI should be selling their computer chips super cheap because they were just sand and sand is cheap.

--Darin

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post #26 of 114 Old 12-20-2009, 07:01 PM
 
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This is just an aside to most of this but people also forget about the"cost of doing business".

A building costs $$, Insurance for employees, Utilities,Labor cost, Business Insurance...
There is a lot more to operating a business than people think.

One more quick point.
I own a restaurant. Our "parts" are food. On average our parts cost is 30 to 32 cents on a dollar. Holy cow, we make 70%. By the time you add in the above listed items and more, most restaurants are lucky to make 5 to 8% profit.

The average joe as no idea what it REALLY cost to run a business.

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post #27 of 114 Old 12-20-2009, 07:59 PM
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Quote:
Originally Posted by scottyb View Post

This is just an aside to most of this but people also forget about the"cost of doing business".

A building costs $$, Insurance for employees, Utilities,Labor cost, Business Insurance...
There is a lot more to operating a business than people think.

One more quick point.
I own a restaurant. Our "parts" are food. On average our parts cost is 30 to 32 cents on a dollar. Holy cow, we make 70%. By the time you add in the above listed items and more, most restaurants are lucky to make 5 to 8% profit.

The average joe as no idea what it REALLY cost to run a business.

Scott

My family has been in the restaurant business for a long time - it's easy for people to sit on the outside and think that you're raking in cash. In reality there's a lot of blood, sweat, and money that goes into any business to make it run. There's a reason that most people don't own their own business - owning a business opens a person up to a lot of risk and requires a lot of sweat equity. The lucky ones make it out of their first five years without going bankrupt; however the majority do not.

There are 10 types of people: those who understand binary, and those who don't.

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post #28 of 114 Old 12-20-2009, 09:38 PM
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Quote:
Originally Posted by scottyb View Post


The average joe as no idea what it REALLY cost to run a business.

Scott

I agree but that won't ever stop them from making wild statements with no basis in reality or economics.

Absence of evidence is not evidence of absence

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post #29 of 114 Old 12-20-2009, 10:06 PM - Thread Starter
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I'm pretty sure I'm the only professional economist here. I also don't mind making wild statements or being based in reality.
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post #30 of 114 Old 12-20-2009, 11:43 PM
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Originally Posted by Tryg View Post

I'm pretty sure I'm the only professional economist here. I also don't mind making wild statements or being based in reality.

Ah, might explain your lack of understanding of a complex piece of Engineering then.....it's not the same as a sheet of shiny screen material.

Zooming: Been there, done that, bought the lens...
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