August 18, 2015
Fear of timing innovations poorly and increasing competition have led to the recent earning slumps recorded by 3D printer manufacturers, an industry writer has said.
3DPrint.com’s Brian Krassenstein says that the current slowdown for groups like 3D Systems and Stratasys is “more than just a cyclical lull”. Similar to the regret a consumer feels when having brought the latest smartphone and a new model comes out just two weeks later, “companies are afraid of purchasing a 3D printer that’s on the market new for fear of bad timing”.
As Brian Drab, Analyst for William Blair & Co., told the Wall Street Journal: “We’ve gone through an early adopter phase where [companies] bought printers to convey innovation. We’re going into more mainstream adoption where you’re going to look silly if you make a capital investment in a printer that runs at 5% of the speed that’s coming onto the market. Why not wait?”
Krassenstein comments that there are devices being developed that could improve on what is currently on the market, giving the examples of HP, Carbon 3D and “others […] working on 3D printers which could drastically improve quality and turnaround times of printed objects”. HP said in April 2015 that it would launch its Multi Jet Fusion technology for 3D printing in late 2016, and it was announced in July 2015 that its upcoming immersive computer would feature 3D scanning technology.
The writer adds that “there is little doubt” that groups like Stratasys and 3D Systems have their own research going into upgrades, yet “businesses may be waiting a year or two for their next major capital expenditure”, reducing overall revenue for the major industry players for now.
This last consideration brings his thought on to the effect of competitors on the current slump, as “it’s not necessarily true that they [customers] will be purchasing their next new machine from any of the major established players” who currently dominate the industry. Mentioning HP’s Multi Jet Fusion project and Carbon3D’s CLIP 3D, Krassenstein said that along with a growing demand for 3D printing is the supply, as “new startups as well as established tech companies enter a space which has traditionally been ruled by only a handful of manufacturers”.
Growing competition will cause prices to drop, while R&D expenses increase and margins shrink, as “is to be expected within any growing industry”, and has just begun to happen in the 3D printing space. “The established companies will need to leverage their intellectual property and use their experience to outwit, outpace and outperform the competition”, he writes, “ in order to remain on target with their current guidance”.
Krassenstein concludes that despite the difficult climate for investment, technology enhancements will improve product reliability and encourage a fall in prices, and “we will likely see a major increase in the adoption rates of new machines by businesses around the world”.
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