Even before average consumers warm up to the technology, 3D printing has already found enthusiasts on Wall Street. Stock prices for 3D Systems and Stratasys - the two publicly-traded 3D printing companies - surged by five percent on news that Citi analyst Kenneth Wong had put out a buy rating for them. According to Wong’s research note, the market for 3D printing and related services will triple in the next five years as “consumers start to extend use case beyond small batch manufacturing.”
Wong’s predictions are broadly correct. In their specifics, however, those predictions need to be tempered with caution.
The general consumer may be put off by the complexity and price of a 3D printer but businesses have already found new use cases for the machine. These use cases range from 3D printing services to online marketplaces of 3D printed products. As a result, a new category of users, consisting of designers and prosumers, has emerged for 3D printing. In turn, such users complete the value chain by making products that appeal to average consumers.
However, that value chain is not enough to triple market size.
Four Things That Need To Happen To Triple Market Size
For the market to triple its current size, 3D printers need to become cheap, accessible, and user-friendly. In addition, they need to find a way to directly integrate into the average consumer’s life.
Based on recent developments, the first three things are already happening.
The acquisition of Brooklyn-based Makerbot, arguably the most well-known consumer 3D printer in the market, by services firm Stratasys has provided the former with cash infusions to bring down price points. The emergence of printers such as Form1 Labs has pushed the envelope on usability.
The expiration of key patents related to Selective Laser Sintering or SLS machines could further reduce prices for quality 3D printers.This is because SLS printers are currently used to manufacture several high precision and metal products. Similarly, UPS’s tests with stores in San Diego and Washington D.C., are already making 3D printers accessible to lay audiences and drawing curious and enthusiastic customers.
The Limitations Of A Niche Audience
Inspite of hyperbolic mainstream press coverage, however, 3D printers are largely confined to a niche audience. Even they do not use 3D printers to manufacture products.
“I don’t see it in that light at all,” says Adam Nathaniel Furman, a London-based architect and designer, when asked about revenue figures for his storefront on Shapeways, a popular 3D printing service. Furman clarifies that he uses the storefront to develop ideas into material reality and test user reactions. "The cost to benefit ratio is such for prototypes and representations that it is very feasible to use 3d printing regularly," he says.
Based on these user reactions, Furman takes the most successful designs and develops them through more traditional manufacturing methods. “They (traditional manufacturing methods) may have higher up-front costs but will lead to cheaper per-unit prices later on, with a design at this point that I can be confident in,” he says.
UPS has observed a similar use case in its tests for 3D printing-as-a-service recently. According to the owner of the San Diego store where UPS’s test run for its 3D printing service is being conducted, approximately 80 percent of his paying clients for such services were medical students interested in prototypes.
A Killer Application
PCs gained mainstream application with their use of spreadsheets. Apple’s graphics software and Microsoft’s subsequent commoditization of the technology provided the necessary momentum to propel the PC to mainstream popularity.
The role and recollection for 3D printers in popular imagination is diffuse and spread across multiple industries and products. Fantastic objects are fine and, even, intriguing, They produce worthy news bytes. However, average consumers do not 3D print food, bones or guns at home.
Not surprisingly, the two companies covered by Kenneth Wong are companies that sell industrial grade 3D printers to large corporations and businesses and provide services to average consumers. To justify the tripling of its market size, 3D printers need to become significant business revenue streams for mainstream consumers.
