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Kinect to a Manufacturing Revolution

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Microsoft (Nasdaq: MSFT  ) Research has come out with so many fascinating innovations in recent months that it's hard to believe how little recognition it gets. Blogs were abuzz when Google (Nasdaq: GOOG  ) closed down its Labs earlier this fall, but Microsoft consistently comes out with ideas that are both functional and forward-thinking to virtually no fanfare. Redmond can't get any respect -- but the media's blind eye could be your goldmine, as Microsoft's got another great idea up its sleeve.

The future is 3-D
We've heard plenty of things about the Kinect's amazing popularity and its futuristic possibilities, but KinectFusion takes the device to another level. It's a research project that turns the Xbox 360 accessory into a real-time 3-D scanner. The precision and fidelity of the Kinect creates highly accurate 3-D models at a fraction of the cost of existing 3-D scanners, which cost thousands and are typically reserved for professional work. It's like the leap made from the first digital cameras to those in use today, a massive improvement available at a fraction of the cost.

This isn't a revolution by itself, but the connection is obvious: 3-D printing has been gaining ground, with 3-D Systems (NYSE: DDD  ) and Stratasys (Nasdaq: SSYS  ) leading the charge. Fool contributor Brian Stoffel offers some compelling figures: 20% of current 3-D printing output is finished products (rather than prototyping), and that number should only rise as the technology improves. 3-D Systems already has a home model available for $1,300, and Stratasys has partnered with Hewlett-Packard (NYSE: HPQ  ) to roll out a competing device. That's still too high for most home users, and keeps it low-end 3-D printing in the hands of a few intense hobbyists and well-paid engineers who really like engineering.

HP controls 42% of the boring old 2-D printer market, and that brought the company almost $26 billion in revenue last year. Putting a 3-D printer in every home could make that seem like peanuts. Just think about the potential cost of cartridges that print materials rather than just colors on a piece of paper. More use, more replacement, more revenues. It's terrible for manufacturers, though, because it keeps the overall cost of use high.

The tipping point
Simply scanning and replicating objects like on Star Trek isn't going to be the killer KinectFusion app. It's just as -- if not more -- likely that the KinectFusion could become indispensible to a new generation of amateur designers. Combining high-fidelity raw images with sophisticated 3-D modeling software such as Autodesk's (Nasdaq: ADSK  ) 3ds Max and Maya would empower artistic and technically gifted people to take existing objects and tweak them to perfection. A development process of months could be shortened to days, and final designs could be sold as files for users to download and print in their homes. You won't have to keep the designs you download as-is -- just use the KinectFusion to scan any crazy old thing you want to graft onto your designs, and with a few mouse clicks you can come up with a printable light-bulb-covered chair, or a TV growing wings. Who knows? When you print your own products, the only limit is your imagination . . . and how much "ink" you have left.

Once Stratasys and HP bring a consumer model to market, it can only increase the pressure on 3-D Systems to lower its prices. Like most modern printers, you can probably expect much of the long-term profit to come from printing supplies. Combine printer pricing pressure with the KinectFusion's inexpensive scanner, and 3-D printing could make rapid strides toward mass adoption.

You should keep your eye on these companies as they build the future by adding them to your Watchlist. Technology moves fast, and our daily updates will keep you on top of the market.

Fool contributor Alex Planes holds no financial stake in any company mentioned here. The Motley Fool owns shares of Microsoft, Autodesk, 3-D Systems, and Google. Motley Fool newsletter services have recommended buying shares of Microsoft, Google, and Stratasys and creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (4) | Recommend This Article (8)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 14, 2011, at 10:54 PM, thethreestooges wrote:

    That's bad business model for Microsoft. I only need one KinectFusion scanner from Microsoft to scan 3D images, but I will have to keep buying HP ink cartridges for the 3D printer for the rest of my life.

  • Report this Comment On October 15, 2011, at 10:55 AM, XMFBiggles wrote:

    That's a valuable point, and one I mentioned (briefly) in the article. If HP stands to gain the most from 3-D printing, then they'd be a better investment. Of course, that depends on whether or not HP can follow through with its Stratasys partnership.


  • Report this Comment On October 15, 2011, at 3:04 PM, dileepkrp wrote:

    Well you could say the same thing for game consoles, computers, and phones, and tablets, and cars - I only need one Xbox, computer/phone/tablet. But then who laughs all the way to the bank? HP?

  • Report this Comment On October 16, 2011, at 5:36 PM, justthefactsjack wrote:

    What do you get when you combine XBOX, Kinect, Skype & Windows Media Center? A killer consumer product for the living room that lets you search for content, video conference, interact socially live which remembers each user operates on voice command & physical gestures. These 4 parts of Microsoft are going to make a huge splash as soon as they figure out what to call it.

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