3-D Printing Is (Almost) Ready for Prime Time

The Consumer Electronics Show was a parade of innovation this year, as always. The show has become a coming-out party for exciting technology, and this year, 3-D printing had its turn on the dance floor. The devices have thus far been confined to professional manufacturing and niche hobbyists, but some manufacturers are very eager to get into the home market. Growth investors should take note, as 3-D Systems (NYSE: DDD  ) made all the right moves at CES to push its products toward eventual (and probably inevitable) popular adoption.

Flat is old hat
Not long ago, I predicted that 3-D printing would take off for home use in the next five years, with some caveats that still need to be addressed. 3-D Systems took major steps toward that goal at CES, demonstrating a stylish-looking printer called the Cube that's now on sale for $1,299. While this isn't under the $1,000 barrier I was looking for, the suite of ease-of-use apps and developer community paired with the Cube at Cubify.com are necessary prerequisites to mass adoption. Think of the Cube as an iPhone, and Cubify.com as a 3-D printing App Store. The device is important on its own, but becomes a transformative force when paired with a wide variety of useful software.

Another printing superstar in the making?
Hard as it is to imagine now, there was a time in the not-too-distant past when consumer printers of any kind were almost nonexistent. Hewlett-Packard (NYSE: HPQ  ) offered one of the first commercial laser printers in 1984 for $3,600, nearly three times the cost of the Cube. But the home printer market didn't really start to take off until after 1988, when HP's DeskJet broke the $1,000 cost barrier. Here's how the company did in the decade after the release of the first DeskJet:

Despite being that rare fairly valued tech company for much of the 90s bubble years, HP stock still managed to nearly quadruple. Its first-mover advantage and aggressive pricing early on has paid off for decades, as HP still controls over 40% of the global printer market. Although HP is more than a printer company, that segment today accounts for about 20% of its revenue and almost 30% of net income. 3-D Systems competitor Stratasys should make note of this, as the longer they sit out the consumer push, the harder it will be to capture market share later.

A material world
The three greatest challenges I see for 3-D printing's wide adoption are material diversity, resolution, and ease of use. I think it's clear that manufacturers are committed to major cost reductions, and we'll see prices continue to drop going forward.

The Cube offers 10 different colors, but all are printed in the same type of hard plastic, and only one color can be used at a time. This limited material and color palette is common to inexpensive 3-D printers. Costlier 3-D printers already have multi-material capability, so this is sure to be addressed in time. The only question is when. This will be the best source of revenue for popular 3-D printer makers, much as print cartridges are for printer makers today.

Kodak (NYSE: EK  ) chief Antonio Perez pegged much of his company's future to the printer market. But without a broad user base, neither Kodak nor any other printer manufacturer can really cash in on cartridge sales. Did Kodak fail because it took too long to catch the printer bug? That thought should be in the back of every 3-D printer maker's mind as they continue to improve their machines. Material diversity will be essential, not to mention profitable. We want more than plastic parts.

Sharp like a razor blade
The resolution of low-end 3-D printers leaves something to be desired. Completed objects often appear somewhat jaggy or unfinished, particularly when made in low-end machines. The Cube's resolution, for example, is about 20 times worse than a $30,000 Stratasys model. Good 3-D printers have already proven incredibly precise, but now they have to be precise and cheap. The battle between resolution and cost might hinder faster price cuts, but Lego-style blockiness of any sort will hinder adoption as well.

Easy like Sunday morning
If you want to print this article, all it takes is control-P and a quick tap of the enter key. Imagine doing that with a fully rendered 3-D object. What if the size is wrong? What if there's a hole in the wrong place? What if the flicker doesn't flick or the spinner doesn't spin?

A lot of thought goes into the design of most objects you interact with. Some companies have built their fortunes on designing everything in exactly the right place and not a micron off. That takes serious skill, and while I'm hopeful that a strong design and app-development community will help push 3-D printing to the masses, it's going to take a lot of work to bring it anywhere close to the printing we're used to.

Cubify.com is a great step forward, but it's only a first step. The other two challenges can't be ignored if 3-D Systems wants to make the Cube and its eventual descendants must-haves. I still believe it can be done within five years, but it'll take a lot of innovation and creative talent to get there.

It's well worth it to keep an eye on this market going forward. If you're looking for another great opportunity with a stock poised for explosive growth, there's a brand new free report just for you. In it, you'll find everything you need to know about another company with an amazing machine that's changing its industry. Find out more about this once and future multibagger -- reserve your free copy now.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter for more news and insights. The Motley Fool owns shares of 3-D Systems. Motley Fool newsletter services have recommended buying shares of Stratasys. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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 (7) | Recommend This Article (15)

Comments from our Foolish Readers

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 January 16, 2012, at 7:42 PM, climbbikerun wrote:

    Nice article Alex, but there is a company called Solidoodle (http://www.solidoodle.com/) that has a 3D printer for $699.

  • Report this Comment On January 16, 2012, at 9:04 PM, TMFBiggles wrote:

    @ climbbikerun -

    Impressive! Thanks for the info. Looking at the specs, it seems like that printer's resolution is about half as good as the Cube. But it's sub-$1,000. I wasn't aware of anything that cheap before. Hopefully the resolution can be tightened on low-end machines.

  • Report this Comment On January 17, 2012, at 11:55 AM, akutach wrote:

    These seem like fun and a definite for serious design hobbyists. However, what do most people need printed in 3D that will make these must-have gadgets? Documents, forms, and the such let traditional printing to be pushed to the end user and thus a convenience became a necessity in paper printing. So is there something we get that people will just print rather than get or buy that everyone actually needs?

    Could it be replacement parts for items with technical specifications?

    It's something I can imagine, but not quite see. This technology needs somebody to re-design some product that works best when the user has one of these printers.

    How are they marketed aside from cool?

    alan

  • Report this Comment On January 17, 2012, at 5:33 PM, TMFBiggles wrote:

    @ akutach -

    Valid points, and worth serious consideration for anyone thinking of investing in a company trying for a 3D printing consumer push. There's no consumer killer app yet. I'm hoping that collaboration helps find it. Replacement parts aren't a frequent enough issue for the average person to need a dedicated machine. Maybe such things could be rolled out as public kiosks. Who knows?

    - Alex

  • Report this Comment On January 18, 2012, at 4:54 PM, JavaChipFool wrote:

    3d printing is something I have been watching for over a year now. Science Friday video pick of the week has a video of some guy who built one in his house. (some smart MIT tyope guy). http://www.sciencefriday.com/videos/watch/10354

    This is going to be a significant part of the manufacturing economy in the next 5-10 years. I want in on this. The uses and cost reduction for prototypes is huge.

  • Report this Comment On February 09, 2012, at 9:35 AM, suppliesgrouptsg wrote:
  • Report this Comment On January 01, 2013, at 12:59 PM, CheshireCat555 wrote:

    As I've heard, when 2d printers first came out, it was said that nobody would have a need for one in their home. That seems like it was pretty short-sighted - almost everyone at least had a typewriter back then, so I don't see how a printer could have been considered such a leap. BUT - now I find myself saying about 3d printing what was said back then about 2d printing. Who is going to need it in their home??? A lot of what gets printed in 2d either gets filed, mounted on a wall, or thrown away. It's only (somewhat) expensive paper & ink. Obviously, a 3d printer will not be able to make assemblies of more than one part at a time, and the one used where I work takes 24 hours to make just one small object - watching it work is like watching grass grow. That unit is only 1 year old.

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