Many of the same troubling signs are present in today’s consumer 3D printer market. Even if 3D Systems and Stratsys — the company that bought garage startup and 3D printer darling MakerBot last month — manage to move a ton of 3D printers this holiday season, I suspect the honeymoon with consumers may be short-lived as the reality of the limitations sets in. Despite the hype around 3D printing, I wouldn’t buy into it today, either as a consumer or an investor.
The Death and Life of 3D Printing
If 3D printing suffers a crash like the video game industry did, there is an opportunity for it to experience a similar resurgence. An article on the future of 3D printing published in Quartz points out two key factors that are likely to change the equation in coming years.
First is the fact that Chinese manufacturers are beginning to pile on the 3D printer bandwagon. That’s going to have the effect of lowering prices for the devices, which could help boost adoption (but would hurt companies like 3D Systems that will be forced to cut prices to compete).
The more important fact is that key 3D printing patents are set to expire in 2014. Current consumer level 3D printers use a layering process that results in those rough printed models, but a process called “laser sintering” allows for much more detailed and polished end results. The expiration of those patents is expected to lead to consumer-level 3D printers that employ the superior technology being used by much more expensive, commercial-grade printers.
On top of that, 3D scanners aimed at consumers are currently under development. Combine a 3D scanner (which makes a three-dimensional copy of an object) with a higher quality 3D printer, and many of the obstacles to widespread adoption are taken care of.
And then things could get interesting.
Interesting enough that current printer giants like Hewlett-Packard (HPQ), Canon (CAJ) and Samsung (SSNLF) — who makes everything else and might as well give 3D printing a shot too — could make a move to challenge the dominance of players like 3D Systems and Stratsys. Especially if the 3D printing market bottoms out in the short-term and they can pick up one of the many independent companies like Printrbot on the cheap, or simply partner with a Chinese manufacturer.
Wait for the Crash
Personally, at this point in the 3D printer market, I’d wait for a crash or at least a softening to see who’s still a player afterward. Look for companies in position for a mass-market relaunch and that have marketing/distribution muscle.
The first wave of mass-market consumer 3D printers might end up sputtering, but, like the home video game market, I suspect version 2.0 won’t be far behind.
And that will be the point at which it truly explodes.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.