Are Major 3D Printer Manufacturers Prisoners Of Their Technologies?

By on October 9th, 2017 in Ideas

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 Is there any escape for 3D printer manufacturers?
Is there any escape for 3D printer manufacturers?

I’m thinking about how new 3D printing processes can affect existing companies, and it’s not pretty. 

The thought was triggered by yet another speculative story from an investment newsletter that was wondering whether to buy or sell a 3D printing stock. Stratasys, in this case, but it doesn’t matter.

The piece talked about how the stock rose precipitously during the 2014 ultra-hype period of 3D printing, and then crashed mercilessly in the following years. The same could be said of ALL 3D printing stocks, as they all underwent the same treatment by the market. Basically it was caused by the public’s overestimation of the 3D printing capabilities, and the subsequent let-down when they realized it wasn’t what they hoped for. 

The report postulated whether this company (Stratasys) could recover in the future and drive up a higher stock value. The writer of this story, and those of countless other investment-related speculation, generally have no idea what’s really going on in a 3D printing company aside from their basic financials and some analytics on their stock price movements. 

But you and I do know more. 

We know that the larger 3D printing companies have patented their processes long ago and have built huge businesses based on those patents. We know they have developed business models dependent on the revenues generated by the way in which they’ve applied their patent to the market. Some companies, for example, charge highly for their proprietary materials that are required for use in their equipment. 

But we also know that all 3D printing technologies are vulnerable. We know current methods are generally very expensive to produce objects, which has limited their application in industry. 

That hefty usage price opens the door very wide for competition and innovation. And therefore we see researchers working diligently on new forms of 3D printing, with many new techniques emerging each month. New materials also keep appearing. 

This puts the larger 3D printer manufacturers in a vulnerable position. What happens if a new market entrant develops a new 3D printing process that’s better and less expensive than current approaches? 

Does that happen? It does indeed, from time to time. Most recently we’ve seen how “cold” 3D metal printing processes have emerged to take a bite out of the main 3D metal printing market, and these approaches could theoretically be scaled up to take even more. 

I believe the only route a major manufacturer can take is to continue to innovate. And by innovating, I don’t mean tweaking the original process; I mean inventing new ones, just like their competitors are doing. That means I’d like to see these manufacturers have a very healthy R&D budget, with frequent releases of new developments. Sometimes that’s the case, sometimes not. 

Short of that, I suppose they could buy the competitors, too. 

Meanwhile, the analytical investors may find themselves caught when they commit to buying stock of a big 3D printing company, only to find their business model is mortally wounded overnight when a new entrant appears. 

By Kerry Stevenson

Kerry Stevenson, aka "General Fabb" has written over 8,000 stories on 3D printing at Fabbaloo since he launched the venture in 2007, with an intention to promote and grow the incredible technology of 3D printing across the world. So far, it seems to be working!