Falling sales for Stratasys and 3D Systems are “directly tied to early entry assimilation in large companies”, a 3D printing entrepreneur has said.
In an interview with 3DPrint.com, Rick Twiggs, who runs technology consultancy Unchained Thought, said that in the future there will be a movement towards consumer 3D printing. He said of the current situation: “Many companies have purchased millions of dollars in machines to use in-house and will not be purchasing any more machines for a while. There is also a trend in the stagnation of 3D print bureaus, which I believe many businesses are realising is very similar to, if not identical to the traditional printer industry back in its heyday.”
Twiggs first used 3D printing to create a prototype of a diabetic pump, and when he “saw the steam that 3D printing was generating” he decided to set up the first 3D printing service bureau in the US state of Louisiana. There are now 10 similar bureaus in Louisiana.
He sees a parallel with the development of 2D printing as a “breakthrough technology within the business space” as large companies used to “outsource their paper printing to companies such as Kwik Copies, Kinkos, TRM, etc.”. Businesses were unable to invest large amounts in the innovation, until prices began to fall and then they began buying the devices themselves. Twiggs said: “These purchases would drive the price further down for other companies to enter into the fold, and eventually personal printers would become talked about.”
Preceding this, according to the consultant, was the emergence of paper print bureaus such as Office Depot, Fed Ex, Kinkos or Staples: “These would help to fill the needs of [the general population] who could not afford [printing services] or did not want to have a printer in [their] home.” After this came the consumer market, meaning that “everyone has a home printer” and that the print bureaus were dismantled.
Twiggs anticipates a similar future for 3D printing, but that it will happen much more quickly. Another difference is the “negative variable” of additive manufacturing networks such as Red Eye and Stratasys-owned Solid Concept, which are “large-scale 3D printing hubs”; they will “cannibalise” the market and possibly end the need for 3D print bureaus.
His contention is that this links in with falling sales figures from Stratasys and 3D Systems, as the larger hubs may take over from the localised print bureaus, being able to handle the same workload without the need for upgrades.
“Simply put, 3D printing is disrupting its own market,” Twiggs said. “In fact, it is disrupting it so badly that I believe we will see an increase in consumer 3D printers being bought and a very violent decline in local print bureaus.”
A rapid transition to consumer printers will affect the business models of Stratasys and 3D Systems, and while “there will continue to be demand for industrial grade printers […] specific projects will require such machines”, the big players will eventually “enter heavily on the consumer market”. The technology consultant anticipates “a few more spikes in profits” in the months to come, but overall the sales will decline as “many large corporations already have printers of their own and do not want to currently add anything new”.
“The end result is a complete transition from focusing on large expensive machines to early entry. Stratasys has done this successfully so far with [its] assimilation of MakerBot, but a poor marketing strategy and poor merger acquisition has really hurt their sales. 3D Systems needs to follow on board, perhaps with a purchase of a desktop SLA printer.”
The article concludes that “there is no doubt that the coming years will be incredibly interesting for the entire industry as the multi-billion dollar company HP plans an entrance into the industrial 3D printing space in the latter part of 2016”.
Stratasys recently released [http://www.therecycler.com/posts/stratasys-posts-216-million-loss-for-1q2015/] its quarterly results for 1Q2015, posting a $216 million (€189 million) loss. In another article [http://www.therecycler.com/posts/is-3d-printing-facing-a-slowdown/] discussing whether or not 3D printing faces a slowdown, it was predicted that customers are “behaving more rationally and conservatively in their purchasing decisions” and as such, “bets that the 3D printing market will recover for the second half may be a bit of a stretch.
“It’s unclear whether HP can back up its 3D printing talk over time, but enterprises will have to at least conduct due diligence if only to squeeze existing suppliers such as Stratasys and 3D Systems”.