The interactive whiteboard (global) market is marching toward a milestone of reaching annual shipments of 1M units in 2010, and already passed the $1B revenue mark in 2009, according to Futuresource Consulting, a London, UK based market research firm that tracks the whiteboard industry. Futuresource (formerly Decision Tree Consulting) recons the global market for interactive whiteboards will grow to $1.8B by 2012 at a 19.5% CAGR.

Steve Sechrist
Senior Analyst and Editor

At the forefront with dominant market share in most major geographies is Smart Technologies (Calgary, Alberta) shipping just less than half (360K units) of the total market (750K units) worldwide. According to a recent article in the Ottawa Citizen and a Wikipedia article citing FutureSource data from a Q4-09 market report, Smart Technologies has a 63% market share in the United States, 57% in the UK and 52% market share globally, with Smart’s fiscal year earnings (ending March-10) hitting $142M.

The company is bullish on interactive whiteboards, and Wall Street is bullish on Smart, as evidenced last week, where the company made headlines with the largest IPO (via NASDAQ) in a decade (from a Canadian company) raising $660M on roughly 38M shares.

With its whiteboard technology, Smart dominates key marketing areas like education, business, and broadcasting, and while Smart has dealt handily with the competition from companies like Hitachi and Wacom, others are now gunning for this space with non-traditional solutions that virtually eliminate the need for the whiteboard all together.

In July, we reported on the plethora of new projectors that support interactive pen technology, offering interactivity with a projected display. Most of these are empowered by a new Texas Instruments system called DLP Interactive technology that allows projectors "…to turn any wall into an interactive whiteboard and interact from anywhere in the classroom."

Competition in the Whiteboard space is also heating up from another camp - repurposed flat screens that enjoy the benefit of a bright image in a fully lit room. In fact, projection is facing some stiff competition from flat panel displays displacing them in the boardroom (and to some extent price sensitive education.) Moving to a pen enabled front projection technology (sans the whiteboard) could save school districts money as a flat panel option was thought to be too costly an alternative.

Not any more as schools and businesses are replacing front projectors with flat screens in part due to the TCO (total cost of ownership) for projectors that can be higher than flat screen TVs due to the added cost of multiple lamps over the life of the projection system. The lifetime cost of a traditional conference room projector can approach (or even surpass) large screen PDP or LCDs with touch options and low cost PC. Such solution will fit the bill for many school district IT departments.

ASPs for flat screens are attractive too. i4U.com reported a recent (refurbished) 40-inch Sony BRAVIA selling on-line for $499.99 plus free shipping. PDP sets have also been selling at record lows and both flat screen technologies offer a bright image in high ambient settings like the classroom. On the other hand, 2500 lumen prohjectors can be easily obtained for $600-$800 and offer a much bigger screen size.

The projector industry is not standing sill either. The trend in projection is moving toward LED illumination, and that will (eventually) help drive the TCO issue away for good. The question is, when can projection systems offer a bright enough LED based solution for bright classroom viewing?

So while Smart’s digital white boards have been embraced by schools across North America, the EU and Asia, and currently account for 70% of Smart Technologies sales, don’t look for the market to stand still as a new crop of hybrid devices are targeting the once humble education market. We think the company’s biggest competitor may not be a smart board at all but a more sophisticated technology evolution that is empowering a credible threat to Smart’s dominance in the space. Innovation is crouching at the door of Smart’s market share, and as always (particularly in budget conscience education markets) price is a critical driver.

With a pile of new investment cash in hand, it will be interesting to see how this old, yet innovative company responds and just what new offerings it has stashed away in the labs that can now come to light with a fresh bankroll to back it.