3-D Printing Market: Not So Hot
Amid all the hype about 3-D printing, here’s a timely reality check: 3D Systems — one of the best-known pioneers in the 3-D printing market — is exiting the consumer market to focus more on corporate applications.
On the one hand, it’s likely a wise move — especially since just-in-time manufacturers, designers and other vertical markets are warming up to 3-D technologies. Moreover, 3D Systems will need to focus, focus, focus as HP Inc. and other entrenched printer makers pursue 3-D opportunities.
Consumers: Canaries in the 3-D Coal Mine?
But on the other hand, consumers often are “first adopters” or “early adopters” of leading edge technologies these days. 3D Systems’ retreat from the consumer market — only days before the big Consumer Electronics Show kicks off in Las Vegas — affirms that consumer wallets aren’t all that interesting in 3-D printing… at least not yet.
3D Systems will stop making the “Cube” printer, which costs $999. It sounds like the business impact will be minimal — a 2 percent hit on revenues… while profits will actually improve.
Citigroup suggests 3D Systems’ exit from the consumer market is a positive move over the long haul, though it raises questions about the health of the industry along with rivals like Stratasys — which develops the MakerBot consumer 3D printer, Barron’s notes.
No doubt, the 3-D printer market is growing rapidly — though I’m not sure if it’s keeping pace with some of the more optimistic market forecasts that I’ve seen. For instance, overall 3-D printing industry revenues will top $12.8 billion by 2018, up from about $3 billion in 2013, predicts Wohlers Report.
Consumable Cost Concerns
Perhaps some of the problem involves the overall customer mindset when they hear the term “printer.” The moment you buy a traditional printer, you’re signing up to pay for high-margin consumable goods forever. Alas, nobody enjoys paying a big markup for printer ink. Now, apply that same example to the 3-D printer market.
Frankly, consumers are worried about getting ripped off. As CNN Money noted:
Plastic filament, the standard material used by 3-D printers typically ranges in price from $25 to $45 for a kilogram depending on the quality and manufacturer. That’s a huge markup over the $2-per-kilogram cost of the plastic pellets used to make the filaments.
Sorry, but I don’t have any budget for another consumer addiction. My money is already tied up with my daily caffeine addiction.
Managed 3-D Print Services
Still, 3-D printing will enjoy a strong following in key verticals like manufacturing. As a result, plenty of folks ask me if there’s an opportunity for managed 3-D printing services.
Hmmm… Loyal readers know that I’ve never been all that impressed by the managed print services market. Perhaps because (A) only a few MSPs I know actually make a lot of money in managed print services and (B) most of the printer makers have their own sales teams, and promote managed print services directly into midmarket and enterprise accounts.
Of course, there certainly are examples of managed print services success. And I suspect we’ll hear more and more success stories as companies like Konica Minolta (owner of All Covered) and Ricoh (owner of mindSHIFT) continue to connect the dots between office equipment and managed services.
Nevertheless, I haven’t expected a “big” managed services wave for 3-D printers. And in many cases, I simply don’t see traditional printing and 3-D printing as the same market.
Within the traditional printer market, I see managed services tied to document management and overall content management opportunities. Within the 3-D printer market, I see managed services potentially tied to manufacturing, design and other types of product-centric shops.