According to Wohlers Associates, the 3D printing industry is expected to grow by approximately 31% per year between 2013 and 2020, and will eventually generate more than $21 billion in worldwide revenue. With such attractive industry growth prospects, many outside companies have made their intentions clear that they are going to enter the market in the near future.
Hewlett-Packard (NYSE:HPQ) is among the group of outsiders, and plans to introduce a 3D printer in late 2016 based on inkjet technology it's calling Multi Jet Fusion, which it claims is up to 10 times faster than current material extrusion and selective laser sintering technologies. With the infrastructure, expertise, and resources that HP has at its disposal, it's clear the tech giant shouldn't be taken lightly by 3D Systems (NYSE:DDD), Stratasys (NASDAQ:SSYS), and other 3D printing stocks.
As Mcor Technologies CEO Conor MacCormack sees it, 3D Systems and Stratasys could be used as a feasibility study for other companies to understand the economics of the 3D printing business before entering the market. Headquartered in Ireland, Mcor offers professional 3D printers that rely on ordinary copy paper as their primary material to produce 3D-printed objects in full color and monochrome for a fraction of its competitors' costs.
At the Inside 3D Printing Conference held in New York City last month, 3D printing specialist Steve Heller had the opportunity to interview MacCormack about the relationship between the threat of increased competition, product commoditization, and how it all fits together. In the following video segment, MacCormack offers his insights into the matter, with the belief that HP will likely cause "big headaches" for the largest 3D printing stocks.
A full transcript follows the video.
Steve Heller: I wanted to switch gears here for a moment. Let's talk more about industry growth rates going forward. The expectation is about 31% per year between 2013 and 2020. Basically, the industry is going to grow from [about] $4 billion last year, which is 2014, all the way upwards of $21 billion, is what Wohlers Associates is calling for.
Obviously, that's a tremendous growth opportunity. With that, growth obviously invites a lot of new competition. I think that a lot of companies are seeing that growth rate. Maybe they're looking for new avenues of growth and they'll tap into that.
What I think may happen is potentially product commoditization. I don't know, it's a balancing act, I guess. 3D printing, with the future threat of commoditization, where do you think this is all going to land?
Conor MacCormack: As you said, the growth is very strong. Wohlers is a very good indicator of that. They predicted it over the last couple of years, and it seems to be following that kind of trend into the 20-30 range CAGR [compounded annual growth rate] going ahead.
The commoditization, the ultimate of having personalized goods, is really what drives all of this; if you can have your own sneakers that are personalized to yourself. You're hearing about Amazon, the way they can print out the books, and one run is 10,000, and the next one is two books, and then back at 10,000 or 100,000; that kind of idea of completely customized.
The threat of other companies coming in, like HP's machine at late 2016, it's going to cause big headaches for some of these big public companies, I believe, because they have a whole infrastructure. It's not just hardware. They [already have experience doing this in] a different industry.
Being able to supply goods on demand, very quickly, online, where people can order a product and get things shipped very quickly, overnight -- an overnight part that's very high quality, that's color or whatever you might need, I think that's going to be a big change in the whole service side.
That's going to enable people to actually have very customizable objects. Ultimately, it's going to get to a situation where everything that you pick up is like, "This perfectly works for what I need," because it's a customized object. It's customized for what you needed.
I think the threats are going to come from bigger companies. I think a lot of companies are probably looking at the likes of Stratasys and 3D Systems. They might be looking at them as almost a feasibility study.
They've [grown to] a particular size now, there's a bit of traction. "OK, we can see what's going to happen." I think we're going to have bigger players coming in.
The other thing I also talk about is that innovation comes from any direction and any source. You can have a guy in his home in his bedroom come up with an idea that's going to be a global dominating force.
You can't really predict that. You can't account for that. All you can account for is that it's going to happen. People are always going to invent. They're always going to come up with new technologies.
This [3D printing] industry is at such an infancy that platforms are not well defined. There is no one machine here that does everything for everybody. You need multiple machines to offer a service bureau. You need one for this, one for that, one for jewelry, one for different types.
There's always the opportunity to come up with new technology moving forward, and there's always going to be threats coming in left field.
For us, as Mcor going forward, how do we deal with the threats? We just stick with what we're good at. We know our technology is paper, water-based adhesive, water-based ink. We're very low cost, very high color quality. We see that as being the key differentiator.
We're very unique, and we feel that the market is almost coming to us. It's the same segment of the market -- education, commercialization, consumerized products -- is very much leading itself over to Mcor and what the output is of our product.
We're very excited and very bullish about where we're going in the future.
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Steve Heller owns shares of 3D Systems and Amazon.com. The Motley Fool recommends and 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.