XYZprinting's Answer to a Million-Dollar 3-D Printing Question

Why do everyday people want to buy a 3-D printer in the first place?

Jun 12, 2014 at 7:01PM

As 3D Systems (NYSE:DDD) and Stratasys (NASDAQ:SSYS) battle it out in the consumer-oriented 3-D printing segment, the million-dollar question still remains: Why do everyday people want to buy a 3-D printer in the first place?

With only a few hundred thousand consumer 3-D printers installed worldwide, the answer to this question has been plaguing 3D Systems and Stratasys. 3D Systems' $999 upcoming Cube 3 printer is expected to ship later this month with upgrades that emphasize ease of use. However, it remains to be seen whether a $999 device that prints plastics objects will strike a chord with consumers, simply because it's easier to use. More than likely, price will also play a determining factor with consumer adoption rates.

Cube

Cube 3 3-D printer. Source: 3D Systems.

Taiwan-based XYZprinting, backed by manufacturing giant New Kinpo Group, hopes it has the formula to crack the consumer code by offering compelling products in terms of user experience and features for a more affordable price than competitors. Its upcoming $849 da Vinci 2.1 aims to take on 3D Systems and Stratasys consumer 3-D printers for a price that would likely make investors grow more concerned about profit margins. Compared to 3D Systems' Cube 3, the da Vinci 2.1 features a slightly larger build volume and a dual extrusion print head, and the print materials cost significantly less.

G

Source: XYZprinting.

In the following video, 3-D printing specialist Steve Heller asks XYZprinting senior marketing manager Gary Shu how XYZ will drive consumer 3-D printing adoption rates in the future. Going forward, investors should expect that the consumer 3-D printing segment will continue garner a lot of attention, but isn't likely to drive meaningful business results for 3D Systems or Stratasys unless the consumer use cases and value proposition becomes more clearly defined. In the first quarter, less than 7% of 3D Systems' and 14% of Stratasys' revenue came from consumer 3-D printing.

A transcript follows the video.

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Steve Heller: Let's talk about bringing 3-D printing into people's lives. How do you plan on doing that? Right now, the adoption rates are pretty low. There's only maybe 100,000 or so 3-D printers in the consumer space, installed worldwide. It's a very small market, compared to the amount of households there are.

Gary Shu: That's right.

Heller: How do you plan on growing that?

Shu: By doing that, I think we have to somehow try to answer the million-dollar question, "What do I need a 3-D printer for?" The difficulty of answering that -- if we could answer that, we would already sell a million units now.

But our mentality or methodology for answering that is, as I mentioned, two things. One, to build the product right; into the right spec, right accessibility, and approachability. Another thing is to try to make the price right.

Once I believe that the product is right, the price is right, there will be more users willing to adopt the products, or willing to give a try to our products. Then we can learn back from the user about how they use the 3-D printers. We can have a better penetration into the users, then we can learn from the users about how they use it.

Eventually, through our communication channels, then we can replicate that business model and applications, then we can make an application into the user's level.

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