Japanese consumer-electronics giant Canon (NYSE:CAJ) announced earlier this month at the Canon EXPO 2015 Paris that it intends to independently enter the 3D printing market with a printer based on its own unique technology.
Industry leaders 3D Systems (NYSE:DDD) and Stratasys (NASDAQ:SSYS) have largely had the 3D printing market to themselves. However, it was only a matter of time before another corporate behemoth threw its hat in the 3D printing ring, following Hewlett-Packard's (NYSE:HPQ) announcement last fall that it intends to enter the market in 2016. Companies around the globe have been eyeing this space, given its corporate-mouthwatering growth dynamics. According to industry analyst Wohlers Associates, the 3D printing industry grew 35.2% year over year to $4.1 billion in worldwide revenue in 2014. Wohlers estimates that the industry will grow to $21 billion by 2020, which translates to a greater than 31% compounded annual growth rate.
Here's what 3D printing investors should know.
Canon's 3D printer
Along with its announcement, Canon unveiled a concept of its 3D printer and displayed components made by the prototype. As was the case with Hewlett-Packard's unveil of its Multi Jet Fusion technology last fall, Canon's actual prototype wasn't present at the show. The prototype remained in Japan, where it's still being developed. It's reportedly at least two years away from commercialization.
Canon's 3D printer will be resin-based and aimed at the enterprise market. According to the company's promotional video, the printer's notable features include:
- High speed
- Wide range of materials capabilities
- High precision, capable of producing smooth surface finish -- limiting the need for secondary processing
Here's a snippet from Canon's website:
Our first 3D printer developed entirely in-house has been designed to make the production process quicker than ever before.
We use a resin-based system, which gives any modelled objects superior strength. It also means you can use the same machine to create your prototypes and produce small runs [emphasis mine] of the final product.
With the highest level of precision in the industry we've reduced the need for time-consuming post-processing. Plus, higher modelling speeds and faster setting times mean you'll spend more time innovating and less time waiting.
Canon doesn't specify just how fast it expects its 3D printer to be. However, it's early in the game, so it's conceivable the company doesn't have a good idea yet. Even if Canon does have a general idea, it might not be wise to go on record at this point. Certainly, it's possible that the model it brings to market could be faster than the current prototype.
That said, Canon's website wording that I emphasized above -- "small runs" -- suggests that its 3D printer will likely be in a speed class with HP's Multi Jet Fusion printer, rather than start-up Carbon3D's Continuous Liquid Interface Production (CLIP) printer, also due to hit the market in 2016. HP claims its printer is 10 times faster than those powered by today's leading 3D printing technologies, while Carbon3D's CLIP is reportedly 25 to 100 times faster. Carbon3D co-founder and CEO Joe DeSimone, however, has said that he believes CLIP's speed advantage could eventually reach a factor of 1,000.
Canon didn't announce the type of 3D printing technology its printer uses. However, some sources -- such as TCT Magazine -- are reporting that it uses a form of lamination technology. TCT noted that Canon staffers at the EXPO were the sources of this unofficial information.
Lamination 3D printing technology isn't popular today, as it has some distinct disadvantages, so it would seem unlikely. However, it's certainly possible that Canon's made a technological breakthrough. After all, the company sports some innovation chops. It seems to fly under the radar that the HP LaserJet, the first laser jet printer aimed at the mass market, was powered by a Canon print engine, as were the first models of Apple's LaserWriter.
While Canon currently doesn't make 3D printers, the company isn't a newbie to the 3D printing market. For the past two years, it's resold models made by 3D Systems in Japan, and earlier this year it inked an agreement with the diversified 3D printing industry co-leader to sell its models in Europe. So, it appears that Canon's planned entrance into the market, if successful, could possibly hurt 3D Systems.
Printing a wrap ...
We don't have enough detail about Canon's 3D printer to speculate about specific implications of the company's entrance into the 3D printing market. Certainly, it's too soon to give too much power to a "vaporware" product that's at least two years away from commercialization. That said, investors in 3D Systems and Stratasys shouldn't underestimate the potential rough seas ahead for their companies, both of which are heavily dependent upon the plastics 3D printing space. Deep-pocketed multinationals such as HP ($51 billion market cap) and Canon ($34 billion market cap) have the financial ability to use cutthroat pricing strategies to "buy" market share.
Beth McKenna has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool recommends 3D Systems 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.