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

Backed by Taiwanese manufacturing giant New Kinpo Group, XYZprinting comes with deep pockets and a desire to make a meaningful impact in the consumer 3-D printing space.

Jun 10, 2014 at 5:44PM

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.

Steve Heller owns shares of 3D Systems and Amazon.com. The Motley Fool recommends 3D Systems, Amazon.com, and Stratasys. The Motley Fool owns shares of 3D Systems, Amazon.com, and 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.

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