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HP Inc “could cause problems” for 3D printing competitors

HP Inc “could cause problems” for 3D printing competitors

April 1, 2016

HP's 3D printing unit

HP’s 3D printing unit

The OEM’s decision to enter the market “could cause problems for 3D printing stocks” across the global market.

Benzinga reported on analysts’ speculations on HP Inc’s move into 3D printing with its MultiJet Fusion machine later this year, noting that the move “could put 3D printing stocks under pressure”. One analyst, UBS’ Steven Milunovich, maintained that investors should sell stocks in 3D printer manufacturer Stratasys, as “we continue to view 3D printing as a classically disruptive technology, starting in niche markets addressing non-consumption then moving into mainstream production as the technology improves”.

In terms of the impact on 3D printing companies, Stratasys and 3D Systems had seen surges in revenue in the final quarter of 2015, as well as outlooks for “modest revenue growth” in 2016, but Milunovich noted that “there are growing concerns surrounding HP Inc’s entry later this year […] although HP Inc should grow the pie over time, the initial impact could be negative for today’s leaders”.

This could come in the form of “margin pressure”, with HP Inc set to “formally announce” the machine in “a few months”, with availability “by the end of 2016”, and Milunovich’s view is that “HP Inc would not pursue a consumables monetisation model”, and might instead “open up materials to third parties to make costs reasonable”, while making money on “hardware, services and fusing agents”.

This fits in with comments from HP Inc’s CTO Shane Wall recently, with The Register speculating that HP Inc “won’t shake you down for ink in [the] 3D printer era”, as it is “threatening to bring an era of open platforms to 3D printing”, which it believes will “turn the well used – and much criticised – ink toner supplies [business] model on its head”.

Wall believes that HP Inc’s MultiJet Fusion machines will be “incredibly disruptive”, and “fundamentally change the industry”, with four factors having “hampered growth” in 3D printing including speed, price, quality of parts, and “the closed nature of the industry”, with HP Inc’s machine claimed to “solve these restrictions”.

With 3D printing’s “closed nature”, HP Inc believes that the open platform will be a “move away” from the traditional consumables model, which The Register notes “some may describe as the protectionist racket that HP et al masterminded for traditional toner cartridges”. HP Inc will “still have print and supplies, but our model will be different; we will open up the platform so people can have other supplies that come in”.

Wall added that other suppliers will “have access to our APIs (application program interface) through an SDK (software development kit) that allows them to programme to the printer itself, and we’ll allow people to come in and do very disruptive new materials that they wouldn’t have been able to do before. [This is] very different from HP and very game-changing”. With this move, Milunovich speculated that Stratasys’ margins of 80 percent on materials “would come under pressure”.

Categories : Around the Industry

Tags : 3D printing Business HP Inc

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