3D Systems (DDD 0.28%) is about to jump on the Apple (AAPL -2.08%) Watch action with a company called FreshFiber, which will soon begin selling its 3D-printed Apple Watch bands through 3D Systems' Cubify online store.

According to 3Dprint.com, the bands are expected to cost between a $40 3D-printed iPhone case and $99 Nooka watch that features a 3D-printed band. Based on the mockups, FreshFiber's Apple Watch bands take advantage of 3D printing's ability to produce intricate designs with ease:

Source: 3Dprint.com.

With Wall Street estimating that Apple Watch will sell anywhere from five million to upwards of 40 million units, 3D Systems could have much to gain from Apple's Watch success with very little at stake. However, before investors get ahead of themselves and declare the Apple Watch a big potential winner for 3D Systems, let's run some numbers.

Quick math
There are a lot of variables that could influence the opportunity that Apple Watch represents for 3D Systems, including:

  • What percentage of Apple Watch users opt to purchase a third-party band?
  • How many Apple Watches are sold in total?
  • The mix of Apple Watch models sold
  • How much of a cut 3D Systems gets for each Apple Watch that FreshFiber sells through its store
  • The competitive landscape for third-party Apple Watch bands

Using the conservative estimate that Apple Watch will sell only 5 million units in the first year, which seems high for a first-generation product, it's still difficult to gauge how many Apple Watch users will want to replace their standard issued bands with a 3D printed version. It's also probably safe to assume that the majority of 3D Systems' potential customers will come from Apple Watch Sport users, considering higher end models often feature costlier watch bands that are presumed to be superior in quality.

To err on the side of conservatism, let's assume that of this 5 million estimate, only half -- 2.5 million -- Apple Watch Sport models are sold, the 3D-printed band will cost $70 (the midpoint of the bands' expected price range), and 3D Systems will take home its standard 30% cut for products that designers sell through its online store. Using these inputs, 3D Systems stands to generate $21 in revenue for every 3D-printed Apple Watch band FreshFiber sells.

If 1% of the 2.5 million Apple Watch Sport users purchase FreshFiber's 3D-printed watch bands over other third-party bands, the opportunity would be worth about $525,000 in annual revenue for 3D Systems -- peanuts compared to the $861.2 million in revenue the company is expected to generate in 2015.

Now, if we get aggressive and say that Apple sells 20 million Apple Watch Sport models in the first year, and 3D Systems captures the same conservative 1% of users that want third-party bands, the annual opportunity would be worth $4.2 million.

The big picture
The idea of 3D-printed watch bands certainly embodies 3D Systems' larger "3D Printing 2.0" initiative, involving the mainstreaming of 3D printing technology to consumers. Although there were a lot of assumptions baked into this exercise, investors probably shouldn't get too excited over the prospect of 3D-printed Apple Watch bands for 3D Systems, because it seems likely that they will only represent an incremental opportunity for its underlying business.