In the following video, 3-D printing specialist Steve Heller interviews XYZprinting senior marketing manager Gary Shu. Backed by Taiwan-based manufacturing giant New Kinpo Group, XYZprinting introduced the da Vinci 1.0 consumer 3-D printer to much fanfare, which currently remains ranked the best-selling 3-D printer in Amazon.com's 3-D printing store.
Topics covered include:
- How XYZ plans to disrupt the consumer 3-D printing space
- XYZ's plans to make 3-D printing more relevant to consumers
- XYZ's distribution model
- How XYZ isn't trying to start a price war with 3D Systems (NYSE:DDD) and Stratasys (NASDAQ:SSYS)
- XYZ's extremely ambitious plan to sell 1 million consumer 3-D printers in 2016
A full transcript follows the video.
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.
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.
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.
Heller: Talking about selling the printer -- the distribution model -- 3D Systems and Stratasys both use a reseller network. They also sell direct. How do you plan on approaching XYZprinting?
Shu: Initially, I think we will try to go direct to our users, give it a bit of a personal touch by selling through online channels. As I mentioned, 1.0s are already available on Amazon, so we think a couple of weeks that we are on Amazon, we're already the top sellers in Amazon stores, so that's a really encouraging thing for us.
But on the other hand, we are also at the same time talking with lots of brick and mortar physical stores. Very soon, we will be existing in a shop of some famous stores around the nation.
Heller: Very good.
Let's talk a minute about commoditization. Obviously, your printers are much cheaper than the competition. If you do well, the prices of Stratasys MakerBot, the Cube, they're probably going to have to go lower to compete.
Do you anticipate putting further pricing pressure in the future to get the price right, like you said earlier? What is the right price, do you think? Maybe a year or two years from now, do you anticipate again lowering the price to make it even more affordable?
Shu: I don't think we are interested in initiating any kind of price war. That's not our goal. We're just putting our first step to bring the price down to consumer level pricing. But we're not initiating any kind of price war.
In the future, we will have a product line with even higher price of more features, and we might have even lower price for smaller-footprint printers. We might have printers with different technologies, different integration of applications, so we will have different aspects of different product lines.
But I think a pricing war is not our goal here.
Heller: Final question for you; Taipei Times reported that XYZ has a plan to sell one million consumer printers in the year 2016.
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.