Across the entire consumer 3-D printing industry, there are only a few hundred thousand 3-D printers installed worldwide. This fact hasn't stopped new entrant XYZprinting from setting what seems to be an overly ambitious goal of selling 1 million consumer 3-D printers in 2016. For XYZprinting to pull off the impossible, it would likely have to dominate 3D Systems (NYSE:DDD) and Stratasys (NASDAQ:SSYS) with a 3-D printer so compelling, so affordable, that it completely changes the consumer 3-D printing dynamic forever.
Backed by Taiwan-based manufacturing giant New Kinpo Group and armed with $20 million in initial capital, XYZ believes it has what it takes to become the de facto standard in consumer 3-D printing. The company's $499 da Vinci 1.0 printer has become the best seller in Amazon.com's 3-D printing store, demonstrating that it understands the value of pricing versus features. From a strategy perspective, XYZ will remain focused on getting the feature set right -- and the price right, which it hopes will drive continued sales growth in the future.
3D Systems and Stratasys would be wise to watch how XYZ's upcoming dual-extrusion $649 da Vinci 2.0 and $849 da Vinci 2.1 3-D printers preform in the marketplace, as this model offers more features than 3D Systems' $999 upcoming Cube 3 and Stratasys' $1,375 entry-level MakerBot Mini. However, investing in 3D Systems and Stratasys because consumer 3-D printing growth will move the needle today is futile at best. The use cases around why an everyday consumer would want or need a plastic 3-D printer today are painfully lacking. The results speak for themselves.
In the first quarter, 3D Systems' consumer revenue represented less than 7% of the company's total revenue, while Stratasys' MakerBot line accounted for less than 14% of its revenue. Whether or not XYZ can drive significant consumer adoption with its upcoming products remains to be seen, but the features-to-price ratio that XYZ's new products propose is certainly moving in the right direction.
In the following video, 3-D printing specialist Steve Heller asks XYZ's senior marketing manager Gary Shu how the company plans to sell one million consumer 3-D printers in 2016.
A transcript follows the video.
Steve Heller: Final question for you; Taipei Times reported that XYZ has a plan to sell one million consumer printers in the year 2016.
Gary Shu: That's right.
Heller: Okay. We're talking a few hundred thousand printers maybe, worldwide, across all of the consumer space. When you include the Maker movement, the Open Source movement... we're going from 200,000 to over a million in two years' time. How?
Shu: That's a really tough target, and honestly it's a bit of a pressure from our boss, that we want to do that much of volume.
But one thing is, the current prediction of the market size is all based on the current scenario, which the price is still a bit high and the usability and accessibility of our products is not as good as a consumer label product should be.
As I said, there are two methods. By doing the price right and by doing the product right, we believe we can do something different and make something different to the existing market status.
I believe that million units mark is not just a dream. It's going to be a realistic thing, once we do the right thing.
Heller: Great. Thank you so much for your time. Best of luck to you.
Shu: Thank you, Steve. Enjoy the show.
Heller: Thank you.
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.