At EuroMold 2014, the world's largest 3D printing conference held in Frankfurt, Germany, in November, 3D printing specialist Steve Heller interviewed Gary Shu, marketing director at XYZprinting, a 3D printing company backed by Taiwanese manufacturing giant New Kinpo Group. With its deep understanding of manufacturing, large economies of scale, and extensive resources, XYZ's 3D printing products tend to offer compelling value propositions in the marketplace.
For instance, XYZprinting's da Vinci 1.0 AiO 3D printer offers the ability to scan and 3D-print objects in the same device for $799, an unheard-of price point and feature set compared to 3D Systems' (NYSE:DDD) line of consumer-oriented 3D printers.
During the interview, it came to light that XYZ has intentions of becoming a diversified 3D printing company that focuses not only on the consumer-oriented segment but also on the industrial segment. Consequently, 3D Systems investors would likely be wise to monitor XYZ's future developments, considering it has the backing of a manufacturing giant that's demonstrated a willingness to undercut the competition.
A full transcript follows the video.
Steve Heller: Steve Heller here, folks. I'm joined today with Gary Shu of XYZprinting. He's the marketing director.
XYZ is a very interesting company in this space. They're backed by New Kinpo Group, a Taiwanese manufacturing giant, have a lot of manufacturing expertise, they've got economies of scale, they offer products much cheaper than the competition: MakerBot included, 3D Systems Cube included, Stratasys included.
Gary, I wanted to talk to you today; we're at EuroMold. What are you showing off today at EuroMold? What are some of the most exciting things you've seen as well?
Gary Shu: Thanks, Steve. Actually, there's a really good chance at EuroMold to meet European markets, and at these really professional trade shows to demonstrate our products.
I think other than the existing products being exposed to the market, of course recently we started shipping our... also making global announcement of a 3D scanning device -- the very first printer in the market that you can scan and print at the same time, together in one machine.
The da Vinci 1.0 AiO is one of the main focuses for the show. You do a scan, and then print out. That's the original, that's the duplication. You can see interesting [unclear].
On the other hand, I think we are here to give the market a focus of our next year's upcoming product lines. Of course, maybe at the EuroMold, if we do have a chance to go to CES [the Consumer Electronics Show] you see more of our product lines in CES.
For instance, at CES we're going to reveal our very first non-FDM [fused deposition modeling] technology printers, next year , that can print out... this is actually printed out from our prototype, our new SLA [stereolithography] type of machine.
Other than SLA machines, next year  we're going to have a totally new generation of FDM machine, and also new solutions and the first reveal of industrial-level 3D printers.
That's just showing that XYZprinting is not just [about] having a good price and good products, but we also have multiple technologies. We have a high-end industrialized printer, we have high-quality desktop printers -- we have something even cheaper to be announced next year, so that's a wide variety of products to show from XYZprinting.
That's what we hope, that we can be one of the most spread around [diverse] technology companies in the 3D printing industry.
Heller: Let's talk a little bit more about price points, here. In terms of CES, it sounds like it's going to be your big reveal for your new upcoming products. In terms of this SLA printer, what is your target price, compared to the competition in the sub-$5,000 market of these devices?
Shu: Of course, we haven't really yet decided a final street price, a target price, for the product yet. But I think for our current targets, as the market might know, the strength of XYZ or New Kinpo Group is that we are really good in manufacturing and supply chain management.
We are targeting for the new SLA machine to be somewhere around half of the existing market price, or even lower. We don't know yet. We haven't really finalized our price yet, but we have confidence that we can achieve something around half of the market standard, but with more features and better quality.
Heller: With a lower price, better quality, more features, obviously you're trying to move more units. Can you give me any sort of insight of what sort of unit growth you're targeting internally, and where you want to be, say by the end of 2016? Going forward, where do you see this market going and evolving?
Shu: Yes, of course. Next year  I think is going to be a really big year for us because we have so many new products coming out. Based on our success in the first year, next year we hope we can [have] at least three to four, if not five times more quantity shipped than this year. That's what we believe at least, or that's what we're targeting.
In three years' time, our CEO used to give a really big target of 1 million units combined, in three years' time. I think we are still standing by that target, even though that's not an easy target to reach. But I think we're still confident and staying optimistic about reaching that target in three years' time.
Heller: The market is obviously going to, in your opinion, hit an inflection point in terms of mass adoption to hit that point [level of unit growth], is that correct?
Shu: That's right. That's right. Our vision is that everyone eventually will use 3D printing or have [benefit from] 3D printing products. The first step that XYZ can offer is to lower down the price, to higher up [improve] the usability and quality of products.
We're standing by that kind of a strategy, trying to expand the applications, to expand the usability, approachability of 3D printing by lowering down the price, by making more people be able to approach and to use the products. That's still our strategy.
Heller: I was wondering if you could talk a little bit about some of the hurdles and challenges to driving more adoption. What do you think is getting in the way of adoption rates today?
Shu: I think it's still the nature of the market. Honestly, selling on a global scale some of the regions that we just give a little push, grow really fast -- like Asia Pacific, like Australia and New Zealand. With a little bit of marketing effort, the market's doing really well for us.
But some of the markets are just not as exposed to the technologies, to the idea of 3D printing. Then we give a lot of push, still really working hard on developing the market.
I think application development, the market exposure, the user exposure to the technologies; still a big challenge for us to make the market as big as we wish.
As I said, the market probably is not expanding as quick as we wished -- probably because also XYZ, we do not have that kind of resources to educate a broader market, so we just push it inch by inch to develop our market. I think market exposure to get people to adopt the new technologies is still actually a bit of a challenge for us.
Heller: Creating awareness is definitely central to your growth strategy, so how do you plan on creating awareness?
Shu: I guess application development is one thing. Brand development is another. For instance, this show, EuroMold, is one of both that we do, trying to expose a bit of brand images.
But we will be trying to approach lots of application development, education, engineering, design -- all kinds of applications. We will try to expose it into that kind of smaller events, trying to get more application uses.
Heller: Can you also make the case for buying, let's say a MakerBot versus buying XYZ? What makes your product so much better? Is it just the price? Is it the features? Is it the reliability? What is the marketing angle there?
Shu: That's a challenging question to answer, because we have to admit that MakerBot, they have really, really good products and advanced technologies with so many years expanding into the markets.
XYZ printing is relatively a rookie in the markets, but I think both of us, we are trying to offer our best into the market in terms of our products and technologies, but a little bit of an advantage of XYZ just being our background as a manufacturing group, as supply chain management.
We have manufacturers everywhere in the world, so that gives us a little bit of an advantage in terms of our product pricing, quality controls, and so forth. But still, this is the market that all of us have got to be putting out effort to expand the market. That's the key.
Heller: Very good. Thank you again, so much Gary, for your time.
Steve Heller owns shares of 3D Systems and is dreaming of a day when he can tell his Star Trek replicator, "Tea, Earl Grey, Hot!" The Motley Fool recommends and owns shares of 3D Systems and Apple. 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.