2 Ways That XYZprinting Challenges 3D Systems Corporation and Stratasys, Ltd.

Taiwan-based XYZprinting has high hopes that its upcoming consumer-oriented 3-D printer will give Stratasys (NASDAQ: SSYS  ) and 3D Systems (NYSE: DDD  ) a run for their money. To be available in the third quarter, the $849 da Vinci 2.1 is a bet that XYZ's latest and greatest 3-D printer offers a more compelling user experience and value than pricier 3D Systems' Cube, and Stratasys' MakerBot models. Considering that XYZ's earlier da Vinci 1.0 printer is currently the best seller in Amazon.com's 3-D printing store, the company certainly knows how to strike a chord with consumers, despite it being a lesser-known brand. At the time of this writing, Stratasys' top ranked 3-D printer is ranked eighth overall, while 3D Systems' second-generation Cube is ranked 37th.

Central to XYZ's strategy is user experience and price. When the company believes it's nailed the user experience, it sets an aggressive price that it hopes will persuade consumers to opt for its brand instead of Stratasys' MakerBot or 3D Systems' Cube. In the following video, 3-D printing specialist Steve Heller asks XYZprinting's senior marketing manager Gary Shu about the da Vinci 2.1, and how the company plans to differentiate itself in the consumer market in the context of big players like 3D Systems and Stratasys. Although the consumer space doesn't represent a large percentage of total 3-D printing revenues, investors should still monitor XYZ's reception, because it may encourage the company to expand its offerings beyond the consumer segment.

A transcript follows the video.

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Steve Heller: Steve Heller, folks. I'm here today with Gary Shu, of XYZprinting.

Gary Shu: Yes, hi, Steve.

Heller: Nice to meet you, and I'm really excited for today and the product that you're offering to the market. Can you tell me, what is your plan for the market? You have the Da Vinci 2.1 coming online, $849, consumer 3-D printer.

It sounds like you're trying to disrupt the space. What can you tell me about that?

Shu: After the success of the 1.0 in the market, global-wise, we are introducing 2.1 now, trying to introduce a new, advanced user interface that people can design their 3-D models and put onto XYZ's online galleries, and then access the 3-D model directly from the printer itself. That means there is an improvement in the workflow process, hopefully bringing that into a new era of 3-D printing.

Heller: Great. Thinking about Stratasys with MakerBot and their very powerful brand, 3D Systems and the Cube -- how do you plan on differentiating yourself, and making a splash where the brand recognition right now seems to be American-based companies?

Shu: That's right. It's a really beginning stage for XYZprinting for us, so to enter the market, of course there are two main steps.

What we are trying to do is, first, trying to make the product right, into every single step. By doing that, we're trying to make the printer a little bit more accessible, a little bit more affordable, easy to use out of the box, plug and play, hopefully let the user experience a better 3-D printing process.

On the other hand, I think the price is the key, that we have to introduce the right consumer level pricing into the market. By bringing the right product, and by bringing the right price, hopefully we can bring 3-D printing into people's lives.


Read/Post Comments (6) | Recommend This Article (1)

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 June 10, 2014, at 7:15 PM, imintuit2 wrote:

    Why would you push 3D Systems and Stratasys as your top picks for 2014 and then turn around and throw them under the bus by pushing XYZPrinting?

    Look at the short interest in these DDD and SYSS...

    I don't get why your analysts compete after you tout your top picks for 2014.

  • Report this Comment On June 11, 2014, at 10:40 AM, TMFTopDown wrote:

    imintuit2 --

    It's important for investors to consider all the angles -- regardless of the Fool's formal recommendation through their premium newsletters. As a shareholder of DDD, I'm definitely watching how the competition continues to challenge the company's products-to-features-to-price proposition and whether or not it will affect the underlying business. I'm not necessarily saying DDD is a bad investment -- I just think investors should be aware of the competition.

    At the end of the day, considering a diverse range of insights helps makes us better investors. I know it can be confusing at first to hear conflicting points of view, but that's what makes us "motley." :)

    Hope this clears any confusion.

    Thanks,

    Steve Heller

  • Report this Comment On June 11, 2014, at 12:57 PM, imintuit2 wrote:

    Thank you, Steve. I appreciate your response.

  • Report this Comment On June 11, 2014, at 8:35 PM, TangoXray7 wrote:

    Judging solely on the retail response to this product I'd say they have a good chance of competing; across the board XYZ, DDD and Stratasys have poor reviews for quality and customer service on their retail printers (source: Amazon customer reviews). Based on that Data you could be right about XYZ threatening DDD but that's a little like picking the best horse at the glue factory; None of them fair well. XYZ and DDD are tied neck and neck for dead last while the Stratasys MakerBot comes in "first" with only a 33% "total customer disgust ratio". Here's how you figure that number; divided the number of satisfied customers by the number of dissatisfied. None of them do better than the Startasys MakerBot 2, but that says little since the other two register at 32% (XYZ) and 38% (DDD). It's a race for the bottom near as I can tell.

    I suppose the benefit is that if you go with XYZ you lose less money when you find out the product doesn't work as advertised?

  • Report this Comment On June 11, 2014, at 8:43 PM, TangoXray7 wrote:

    Sorry, I transposed the numbers. XYZ is in the lead for dead last in the "total customer disgust ratio" with 32%, followed closely by SSYS at 33% and DDD bring up the back of the pack in the race for best of the worst at 38%.

    Who would buy this stuff?

  • Report this Comment On June 11, 2014, at 9:05 PM, TangoXray7 wrote:

    I give up. I wrote that in the heat of passion. I have no editor, but I do perhaps care a bit too much about this subject.

    Divide the number of dissatisfied customers by satisfied, with "satisfied" being indicated by a 5 star rating and dissatisfied by the number of 1 star ratings.

    I don't own stock in any of the companies mentioned but I may within the next 72 hours. So There.

    What ever happened to the "edit" option on these posts?

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