ARBURG, a German-based injection-molding equipment manufacturer, has developed the ARBURG freeformer, an industrial 3D printer that takes standard injection molding pellets as its primary feedstock instead of the proprietary thermoplastics that 3D Systems (NYSE:DDD) and Stratasys (NASDAQ:SSYS) 3D printers employ. Injection-molding pellets are widely available and cost in the neighborhood of a few dollars per kilogram, whereas proprietary 3D printing thermoplastics for industrial applications can easily cost upward of $200 per kilogram and lock a user into a closed system. In other words, the operating costs of ARBURG's freeformer is significantly lower than that of 3D Systems' and Stratasys' razor-and-blade approach.
In the following video, 3D printing specialist Steve Heller reports from the ARBURG booth at EuroMold 2014, the world's largest 3D printing conference, held in Frankfurt, Germany, to give an overview of the ARBURG freeformer and how it differs from the competition. Going forward, 3D Systems and Stratasys investors should pay close attention to the freeformer's reception, because it threatens the razor-and-blade model -- where the 3D printers are the razors and the consumables are the blade -- that both 3D Systems and Stratasys are relying on as part of their longer-term profitability plans. Currently, it's still too early to know whether or not the freeformer will negatively affect 3D Systems' or Stratasys' underlying business.
A full transcript follows the video.
Steve Heller: Steve Heller here. I'm at EuroMold 2014; I'm at the ARBURG booth.
ARBURG is a very interesting company. They are an injection molding company, they make injection molding equipment. That's their specialty. What they have introduced [showcased] here at EuroMold is the ARBURG freeformer.
What makes the ARBURG freeformer extremely unique is that it uses standard injection molding pellets, which are super-cheap -- they're like $2-$3 a kilogram, really not much -- where[as] the typical 3D printing thermoplastic is somewhere in the neighborhood of $200 per kilogram for leading Stratasys and 3D Systems printers.
As you can see here, obviously ARBURG booth is an interesting place to be this year. The preorders began about four weeks ago. It is shipping in the EU this spring, and will be shipping in the U.S. sometime early next year. They're targeting about a March time frame. It's going to be priced at 140,000 euros.
Right now, the machine can take standard injection molding pellets that you can buy from anywhere, so it's an open platform in that respect.
Right now they have four injection molding pellet materials. They've got polycarbonate, they've got ABS, and a few other materials that they've currently vetted and they're working with their customers to increase the gamut because there are hundreds of different types of injection molding plastics, so this machine is going to be highly adaptable in the future, is what it sounds like.
Right now, there is a dual- or single-based extrusion head, so you can print in multi[ple] materials. You can have, say, a much firmer material as well as a much more flexible material, so you can prototype spare parts with different material qualities.
In terms of the competition here, this can be very disruptive to 3D Systems and Stratasys because the razor-and-blade model is what they use. A user will buy a 3D Systems or Stratasys printer, it'll lock them into the system so you can only buy consumables -- the materials, the thermoplastics -- from 3D Systems and Stratasys.
What ARBURG is saying is, "You know what? We're going to completely eliminate that from the equation. We're going to let you purchase materials [from your preferred vendor]." The operating cost of this printer is significantly less than the competition, so for the industrial customer that makes lots of prototypes, spare parts, functioning prototypes, that's really the big area here.
Compared to an Mcor or a MakerBot -- Mcor is [offers] a paper-based conceptual prototype [3D printer], the MakerBot is also an early stage prototype 3D printer -- compared to those, the ARBURG offers the potential to have final prototypes.
In terms of small-batch manufacturing, the spare parts market, also individualizing mass products... if you wanted to have a standard mass-produced product and 3D-print on top of it, the ARBURG offers that potential as well.
All in all, the long-term vision is that it's early on, folks. ARBURG is not really sure where this is going. The story is still developing and unfolding. As we can tell right now, it looks like ARBURG is going to be a much bigger player in the 3D printing space.
Thanks for watching, and Fool on!
Steve Heller owns shares of 3D Systems. The Motley Fool recommends and owns shares of 3D Systems, Apple, 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.