Will the 3-D Printing Revolution Conquer Your Office Before Your Home?

What if we've (mostly) got it all wrong about 3-D printing?

Last year's hottest trend was the growth of consumer-targeted 3-D printers. With a growing roster of companies -- Solidoodle, MakerBot, Portabee, Formlabs, RepRap, and 3D Systems (NYSE: DDD  ) are just a sample of the more well-known companies with consumer offerings -- competing in a barely tapped market (only 23,000 consumer 3-D printers were sold in 2011), the proverbial sky should be the limit. If even a fraction of today's smartphone buyers decide that printing protective cases and custom earbuds is worth the price of an entry-level 3-D printer, then the industry could take off like the computer industry did in the 1980s.


Source: Wikipedia.

But what if this is the wrong assumption? Last week's 3-D printing industry projections from Gartner focus instead on the cost of business-class machines, which Gartner claims will cost less than $2,000 in just three years:

3-D printers are now priced so that any size business can invest in them and start experimenting with the myriad ways to monetize them. By 2016, enterprise-class 3-D printers will be available for under $2,000. Early adopters can experiment with 3-D printers with minimal risk of capital or time, possibly gaining an advantage in product design and time to market over their competition, as well as understanding the realistic material costs and time to build parts. Furthermore, enterprise uses for 3-D printers have expanded as capabilities of 3-D scanners and design tools have advanced, and as the commercial and open-source development of additional design software tools has made 3-D printing more practical. Gartner believes that the commercial market for 3-D print applications will continue expanding into architectural, engineering, geospatial and medical uses, as well as short-run manufacturing.

Why manufacturing won't die (yet)
To some investors, the spread of consumer 3-D printers is the logical next step in a new industrial revolution of similar or greater scope to that begun by steam engines three centuries ago. When everyone has a 3-D printer, there will be no real need for a sprawling global manufacturing infrastructure -- everything will come from the magic box in your house, set to work at a moment's notice on a new carburetor or cup-holder. This giddy oversimplification of two incredibly complex processes (good 3-D printing and the global manufacturing infrastructure) ignores a number of drawbacks to low-cost 3-D printing, several of which I've explored in great detail over the past year:

This is a starting point for rationales against broad popular 3-D printing adoption. However, it wasn't until I found an article titled "The Achilles' Heel of 3-D Printing" by Peter Friedman earlier this month that the picture really started to crystallize. His conclusions:

  • 3-D printing has a "complexity paradox."
  • "Greater complexity = more + bigger voids = less ink = lower cost."
  • With greater complexity comes slower operation.
  • The complexity paradox and the slowness problem are counter to the advantages of manufacturing: "simplicity, quantity, and speed."
  • "Conventional manufacturing automation is all about making very large numbers of simple things extremely quickly (and accurately)."
  • Even the fastest 3-D printing process is likely to be several orders of magnitude slower than a comparable automated manufacturing process.
  • To compete with manufacturing, 3-D printing has to be much faster.
  • An environment that rewards 3-D printed manufacturing processes is likely to be one in which human beings consume fewer -- but more customized -- products.

You can print out a plastic cup. You could also go down to your local big-box store and buy a pack of six, or 600, in about as much time as it would take for any modern consumer 3-D printer to whip up a single shape. What's the advantage to printing that cup? In fact, if you look around you, I'd be surprised if you could point out a single thing that you could obtain faster and more effectively by crafting it with a 3-D printer than you could by simply going out to buy it.


Source: Flickr.

A home user, in nearly every case, will probably want to see finished products from their 3-D printers to justify the purchase. Businesses, on the other hand, don't necessarily need to justify owning a 3-D printer in manufacturing terms. Many of them are likely to have legitimate design reasons for owning such a printer, and are also likely to have at least one team member with the expertise to make proper use of such a machine. Even occasional 3-D printer use can be justified in many offices when the price tag is below $2,000.

How manufacturing might die (eventually)
Enterprise-quality 3-D printers could become the growth driver that pushes the industry into its own PC era -- the age when mass adoption becomes not only affordable, but practical. It wasn't consumers who initially drove PC adoption in the early 80s, after all -- businesses and schools were big buyers of the first true desktop computers.

Consider that only 6,500 professional 3-D printers sold in 2011. Even if we assume that sales doubled in 2012, and each business bought only one professional 3-D printer, this new total leaves another 99.8% of business establishments in the U.S. as potential customers. 3D Systems and Stratasys (NASDAQ: SSYS  ) combined for a high-end revenue estimate of $930 million in the 2013 fiscal year -- a bit less than half of estimated total industry revenue. If just 2% of U.S. business establishments (there were about 7.6 million, not counting government workers or the self-employed, in 2008) bought a single hypothetical $2,000 professional 3-D printer, it'd generate $300 million in revenue from the sale of 152,000 printers. This doesn't account for international sales or for the sales of print materials and services -- or, for that matter, any sales to schools.


Source: Flickr.

Notice any problems with these numbers? The two biggest 3-D printing companies already expect to make three times this much in 2013. For their growth to continue well past 2016, adoption of these lower-cost professional machines will have to accelerate or the high-end printers of 2016 will have to justify their exorbitant cost against a flood of inexpensive competition -- or both. Industrial-size 3-D printer company ExOne (NASDAQ: XONE  ) sold only 13 of its machines in 2012, and it could be hard-pressed to find buyers for its million-dollar printers if anyone can replicate their material diversity and massive print areas at a fraction of the price. Think back (if you can) to the demise of mainframe computers. PCs replaced the mainframe, and PC manufacturers grew to be worth many times the value of Wang Labs and its contemporaries by shipping dozens, then hundreds, then thousands of times the computers per year as any mainframe maker had ever sold before. But a PC also fulfilled a wider range of needs and wants in the marketplace than a low-cost 3-D printer might.

Here's how 3-D printing might finally reach its promise. Businesses across the country (and the world) begin to install low-cost machines -- first in the creative and the medical trades, and then industries with a less-obvious need for on-demand manufacturing. The software industry rises to meet the need for greater design customization at lower levels of technical expertise. The democratization of design -- already well under way thanks to the efforts of 3-D software maker Autodesk  (NASDAQ: ADSK  ) and others -- makes it possible for the average user to tweak existing designs and modify things they might already have.

Then what?

In the long run, most people won't need their own 3-D printer. On the other hand, millions might benefit from distributed on-demand manufacturing centers that deploy high-quality 3-D printers at scale to produce what people need, when they need it. In the future, these customized products may very well be delivered by unmanned drone, as I suggested in the article linked above. The widespread adoption of lower-cost professional 3-D printers by business (and quite possibly in schools as well) would be a great start, as it would give many people the expertise necessary to use complex 3-D software without the risk of first having to buy a costly machine to play with. This may seem unfathomable to the youth of today, but most people didn't encounter a computer in the 1980s until they went to school or work. This early exposure conditioned a generation to become the innovators and early adopters of the Internet generation. Will this decade's tinkerers be 3-D printing's Bill Gates of the 2020s? A better question may be: Will 3-D printing ever become big enough to create its own Bill Gates?

3D Systems is at the leading edge of a disruptive technological revolution, with the broadest portfolio of 3-D printers in the industry. However, despite years of earnings growth, 3D Systems' share price has risen even faster, and today the company sports a dizzying valuation. To help investors decide whether the future of additive manufacturing is bright enough to justify the lofty price tag on the company's shares, The Motley Fool has compiled a premium research report on whether 3D Systems is a buy right now. In our report, we take a close look at 3D Systems' opportunities, risks, and critical factors for growth. You'll also find reasons to buy or sell the stock today. To start reading, simply click here now for instant access.


Read/Post Comments (10) | Recommend This Article (6)

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 April 05, 2013, at 5:21 PM, ALthinker wrote:

    3-D printing will be limited to prototype work until it can utilize some other material than plastics. Today, companies can print plastic prototypes of metal parts to tinker with but they are still not metal. That is the main problem I see holding back any real boom in 3-D printing. There are only so many uses for all plastic parts and they can be injection molded for a fraction of the time or cost.

  • Report this Comment On April 05, 2013, at 5:45 PM, TMFBiggles wrote:

    @ ALthinker -

    Who's more likely to take an interest in prototype work? The guy in his house tinkering with a little Lego kit, or a business?

    Tinkering has a place, too, and if businesses start to clamor for more utility out of their printers, you might see development start to accelerate.

    - Alex

  • Report this Comment On April 05, 2013, at 5:52 PM, Keith1h1 wrote:

    You are still thinking in today's terms. I know it is difficult, but try to imagine that there are things you cannot imagine.

  • Report this Comment On April 05, 2013, at 7:40 PM, plaasjaapie wrote:

    This is a very poorly researched article pretending to be something quite different.

    Your sales figures for personal printers date from 2011. The production of private printers has been doubling and more annually for several years now, so quoting 2011 figures is just stupid.

    As well, including the RepRap project in the list of "companies" in the sense that Motley thinks of the term isn't even wrong. It's embarrassing.

    Your writer needs to do this whole piece over again and this time do it properly. The conclusions will be quite different.

  • Report this Comment On April 05, 2013, at 10:41 PM, TMFBiggles wrote:

    @ Keith1h1 -

    I tried to imagine things that I can't imagine, but my head started to hurt, so I had to lie down for a while.

    @ plaasjaapie -

    Do you even know what the conclusion is, or are you just looking for a chance to complain? Doubling 23,000 personal printers for 2011 to 46,000 personal printers for 2012 only produces a slightly larger rounding error in the scope of the global consumer market. More to the point, there does not appear to be an accurate 2012 global industrywide sales count for 3D printers yet. Do you have this data available? Does it show any number that wouldn't be considered a rounding error against the size of the consumer market?

  • Report this Comment On April 06, 2013, at 1:29 AM, TangoXray7 wrote:

    Alex you throw out so many misconceptions. It's difficult to address them coherently but let's start:

    "There's no compelling need to print most things in the home."

    Really? None at all? So, let's say I have a plastic light switch escutcheon (that's one of those plastic thingies that surround the light switch so you don't get grubby fingerprints all over the wall). I break it. I'm 30 miles from the nearest hardware store. I can't wait 3 days to have is shipped to me from Amazon because I have card carrying guests arriving tomorrow.

    How about this one? I have a broken Sub Zero 500 Series refrigerator that absolutely must have a nylon part that I can't get from *anyone* since the 500 Series has been out of production for 12 years? The cost to replace the refrigerator is $10,000.

    Shall we continue?

    "3-D printing has a "complexity paradox."

    No, it has a maturity challenge, but no paradox. Are you old enough to remember desktop printing? There was a time, not so long ago, that the very idea of printing a book in your office was patently absurd. Nowadays we don't even bother to print them.

    "To compete with manufacturing, 3-D printing has to be much faster."

    Faster in what way? Faster to the consumer? Yes it must be.

    When I order a part from Porsche and receive the reply "Porsche still has this part on factory back order and they do not have an estimated time of arrival. The part hasn't been discontinued or superseded; Porsche updates us very quickly on those issues. I will check with Porsche and see if the 928 110 272 04 can be used in its place"

    Six months after I order the part, we have a fulfillment problem. The part is made of plastic. If I owned a printer and had access to the CAD drawings I could make it in a day for $3.00.

    You don't understand personal manufacturing. You're assuming everyone needs mass produced items and there is no market beyond that. You are very wrong.

  • Report this Comment On April 06, 2013, at 2:01 AM, TMFBiggles wrote:

    @ TangoXray7 -

    You're assuming that the logical end point of 3D printing is to put a cheap machine in everyone's house and that there's no alternative solution.

    Also, from the gist of your "card-carrying guests" urgency, you sound like a small-business owner, possibly a rural hotelier, which is -exactly- the target audience for 3D printing that I was talking about in the article. Beyond that, your example really stretches the definition of need beyond credulity. You break the plastic cover on a light switch at your house, and the only logical solution is "I shoulda had a 3D printer to fix this so my friends wouldn't think my house is falling apart"? How many times are you going to break a light switch cover at the very last minute?

    If you had the CAD drawings for the Porsche part, you could have had it made on Shapeways and shipped to your house in a week instead of waiting the six months for Porsche. The same thing is true of your refrigerator part. Distributed on-demand manufacturing centers, as I pointed out in the article, can serve the needs of most people who would only use a 3D printer a couple of times a year.

    You justify the need for a 3D printer by pointing out that you can't get rare parts for expensive objects, but you seem to assume that all you need is a 3D printer and the problem will just solve itself. Yes, -if- you owned a 3D printer -and- you had access to the CAD files for the things you needed to replace, things would be easy. But where, exactly, do you expect to find the file for a broken part for a 12-year-old out-of-production expensive refrigerator? Do you have the scanning tools to render that broken part in CAD software? Do you also have the skillset to modify the part so that when you print it it will work perfectly?

    The average person isn't going to go buy a 3D printer just to make a new light switch cover. That just doesn't make any sense.

    - Alex

  • Report this Comment On April 06, 2013, at 9:36 AM, Neologismist wrote:

    Thanks for a great article that has tipped me away from a decision to invest in 3D printing after wavering for some time. I just can't foresee explosive growth in this business. I LOVE the product and I love the futuristic vision, but it's not the same story as PCs, clearly.

    And methinks your detractors doth protest too much.

  • Report this Comment On April 06, 2013, at 10:45 AM, plaasjaapie wrote:

    @TMFBiggles

    "Do you even know what the conclusion is, or are you just looking for a chance to complain? Doubling 23,000 personal printers for 2011 to 46,000 personal for 2012 only produces a slightly larger rounding error in the scope of the global consumer market."

    Seeing as I spent 5-6 years on the core team of the RepRap project and, until this year, helped develop the numbers for personal printer production that appear in that 2011 Wohlers Report, I might have some idea what is going on in that technology sector. While you are right to suggest that the number of personal printers being produced is a "rounding error" given the size of the consumer market, it is anything but a rounding error in the 3D printer industry.

    Indeed, last year's figure for personal 3D printer production was 50% more than all of the industrial 3D printers produced in all the time since 3D printers became available.

    It is also worth noting that while personal 3D printing has been concentrated in America, Europe, China and Australia/New Zealand until the past 12-18 months, locally made models are springing up in places like India and Indonesia.

    Personal 3D printing is spreading, as intended by its originator Dr Bowyer, virally. Most 3D printers being produced are being made by other 3D printers or by very small enterprises. Their spread is not awaiting an HP to accelerate it.

  • Report this Comment On April 06, 2013, at 1:12 PM, TMFBiggles wrote:

    @ plaasjaapie -

    Would it be fair to say that if professional-grade 3D printers were sold at costs approaching today's personal 3D printers -- which is Gartner's projection for 2016 -- the 3D printing userbase would expand more rapidly than even the current pace of personal 3D printing adoption?

    Is it also fair to say that a substantial number of current "personal" 3D printers are already sold to businesses, rather than end consumers? And that many more businesses would be interested in having a more capable printer at reasonable cost than simply an entry-level machine at low cost?

    Going from zero to 50,000 is always going to be huge for whoever manages it. That doesn't mean that it's a trend that can be projected out forever. It's 50,000 to 5 million that's more important. A lot of people got WebTVs in the mid-90's because they were cheaper than regular computers, but the cost advantage became meaningless as PCs continued to improve and their prices continued to fall.

    You've got plenty of industry experience. What do you think is more important: low cost alone, or the combination of acceptable prices and robust capabilities? Everyone has the choice between an iPhone and a flip phone. The flip phone is free, so why do people keep buying the iPhone?

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