Now Is Not the Time to Invest in 3D Printing

The industry still has a few hurdles to clear

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3D printers are one of the most fascinating high-tech products out there.

The technology was a star at this year’s Consumer Electronics Show, and printers like 3D Systems’ (DDD) Cube have begun making their way on the shelves of big box stores. Hobbyists love 3D printers for their versatility, and consumers are being primed to buy them thanks to an endless stream of cool 3D-printed objects being posted online. But a real explosion in the industry remains tantalizingly out of reach.

Are we still at a point where it makes sense to invest in 3D printing companies, or has the big money for investors already been made? 3D Systems stock gained 103% in the past year, while Stratsys (SSYS) is up 32%, so 3D printer investors have had plenty of opportunity for big growth, but continued momentum at that pace seems dicey to me.

However, I’m still a fan of 3D printing and see it taking off in a big way … eventually.

Obstacles

It wasn’t until I had the opportunity to spend some time playing with a Cube 3D printer that I got a firsthand look at the challenges that are holding back the technology. When we solve them, I expect a consumer stampede that will result in big gains by 3D printer manufacturers. You can read the full piece here if you’re interested, but the problems that today’s consumer-level 3D printers face include:

  • Slow results (it can take hours to print a single model).
  • Lack of 3D plans for objects and the potential for repositories of plans to dry up as copyright owners move to stop people from printing copies of their products.
  • Costly supplies. If you think inkjet cartridges are expensive, 3D printers aren’t for you.
  • Expensive printers ($1,200 is still above the level that most consumers are willing to pay).
  • Rough appearance of finished models

I’ve compared 3D printing to inkjet printers in the past (a printing technology that went from commercial to consumer level and took off), but what it’s really reminding me of at the moment is the video game industry circa the early 1980s.

Video game consoles had recently made the leap from garages to store shelves and were the stars of the Consumer Electronics Show. A bunch of companies were rushing consoles to market to take advantage of the hype, consumers were pumped and anticipating being able to play arcade-quality games in their homes. Instead, they got crappy 8-bit graphics and expensive games that hardly resembled their arcade counterparts (even if you squinted).

The result was a massive crash in the industry. North American video game and console sales dropped from over $3.8 billion in 1982 to just $800 million in 1985 leading to some of the biggest companies in the industry — including Atari — going bankrupt or being snapped up as bargain basement acquisitions.

If you’d seen the video game hype building in the late 70s or early 80s and invested then, chances were good you took a beating.

But the industry did recover. A decade later, Nintendo (NTDOY) — the same company that’s in such dire straits now — and Sony (SNE) were selling 16-bit consoles with much better graphics and a stronger lineup of games. The video game industry was well-established and in growth mode.


Article printed from InvestorPlace Media, http://investorplace.com/2013/07/now-is-not-the-time-to-invest-in-3d-printing/.

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