There is a second type of lamp in use, on very high end, and extremely bright projectors, and these work differently. They are xenon lamps. Overall, they have a better color range than the UHP type lamps, and use xenon, not mercury.
These xenon lamps tend to be significantly more expensive, and have a shorter life than most UHP lamps. They tend to start at over $1000, and typically have a lamp life of 500 to 1500 hours compared to UHP lamps good for 1500 to 5000 hours. They also are usually only found on projectors that sell for more than $10,000 (give or take an exception or two).
Why are the projector lamps so expensive?
There are a number of reasons, but I'll try to keep this short, so you can get back to finding the right projector...
1. Projector Lamps are profitable for manufacturers and dealers
Whether this is intentional, or "it just worked out this way", manufacturers have set the price of lamp assemblies rather high. While most lamps sell for $200 to $500, it seems the manufacturer's cost is below $100. This allows many manufacturers (mostly on the business projector side), to do promotions offering "free replacement lamp." If the lamp lists for $399, but the manufacturer pays $90, then the promo has more perceived value to the consumer who sees it as being worth upward of $300. That's a win win for manufacturers - they can offer a promo which costs them less than one would expect. And with typical dealer costs from $170 to $400, the dealers want to make a decent margin, as well. Everyone's happy, but the consumer.
One piece of interesting history - back in 1994 - 1996, most projectors had lamps that only cost $5 - $15 a piece, but then they were the same type that went into overhead projectors, and only lasted 40 hours
2. Limited production - no dramatic economies of scale - not enough projector lamps in use, too many different configurations
Most likely, though, this is the big reason lamps cost so much. There are a great number of different lamps in use in the 500 current projectors on the market. With worldwide projector sales in the 5-6 million units per year range.
For most business and home theater projectors, the lamps run anywhere from about 150 watt lamps to about 300 watt lamps. That too limits using the same core lamp in a wide range of projectors. The brighter lamps make for brighter projectors, but also throw off more heat, so sit inside projectors with more ventilation capability.
With the average lamp, working for at least 2-3 years, the replacement market, is even smaller than the intial market. Think both new and replacement at maybe 750,000 per month world wide.. If the most popular projector sells 100,000 units a year, that's still less than 10,000 units a month, hardly serious manufacturing levels.
By comparison, in the US, alone in 2005, 2 BILLION light bulbs were sold. Also, in the US, over 100 Million of them were CFL's (compact florescent lamps), a number rising dramatically each year. Compare that with US sales of, probalby far less than 100,000 replacement projector lamps a year, and you see that there might be 1000 CFL's made for every projector lamp.
And to illustrate further, today CFL's can cost about one dollar, but the less widely available dimmable CFL's that can work with dimmer switches, still cost $15 or more! Again, economies of scale!
4. Why bother replacing a projector's lamp?
This is the most "amusing" point. Projector prices fall dramatically year after year. For the last two years, should you need a new lamp, many projector buyers now can consider simply replacing the projector.
Two years ago, you couldn't buy a "mainstay" entry level, 2000 lumen XGA resolution business projector for under about $1000, today, look, and several are less than $700. In two more years, that might be under $500. If the projector you bought two years ago, now needs a new lamp, and the cost is $350, and your warranty has just run out. You are likely to buy a brand new projector for an extra $300 or so, and get a fresh warranty, new features, and probably a brighter projector.
Anyone who has a projector out of warranty, which needs repair (usually expensive) needs to figure out, if their lamp has significant hours on it, if they are better off just going with a new projector (with new projector lamp), instead of spending, typically upward of $500 for a repair, plus knowing that they might need to replace their lamp in a few months or year.
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5. Is the high cost, really that high?
Sure, if you have to buy one, that $200 to $400 is a noticeable expense. However, if you are using your projector for business, and you figure the average presentation lasts 30 minutes, then your cost (based on 2000 hours life), is $.05 to $.10 per presentation. In the world of productivity, that has to be the bargain of the century. Photocopies or laser prints of the presentation, will alone, cost far more than that, and the people costs are in a whole other world.
Now, if you are into home theater, then, figure your cost to watch a 2 hour movie, probably is between $.20 $.and $.35 cents. The electric to drive your projector and audio system, is probably more than $.10. So, while you feel it, when you have to break out the credit card for a new lamp, the cost really is reasonable over time.
That doesn't mean consumers wouldnn't be happier if the lamps were $99 or less.
6. Is there hope for lower prices?
Yes. One projector manufacturer already quotes $99 for their lamp, but it is an obscure company that really doesn't have a viable product. Still we are starting to see new home projectors, aimed at the gaming market, starting at $499. InFocus launches their IN1 $499 gaming and home cinema projector tomorrow (Nov. 7, 2007). Unfortunately I haven't been able to find out about the replacement lamp cost, but it's a safe bet it will be under $200, and hopefully much lower.
Based on that type of pricing, we may well see the volume levels to support $100, or, even less expensive lamps. (Mind you, the lamps fro those low end projectors aren't significantly different than for more expensive.
Another possibility, that might help, is if 3 or 4 manufacturers banded together and agreed to use the same basic lamp in all their base portable models. The right combination of companies, and a single lamp could conceiveably be in projectors accounting for 25% of all projectors sold. That could really make a difference, but don't hold your breath. As I said to start, the manufacturers like, at least, the profits they get on selling replacement lamps, although they would love to have lower cost lamps to increase projector sales.