My recent article: 3D Printing is not the next industrial revolution stirred up some debate, and from the many interesting comments received, it focused my mind on a particular area of interest -- the dream of a 3D printer in every home. So could this become a reality, and if so, what exactly will be the result?
There are a number of companies involved in 3D printing, some of the largest being: 3D Systems (DDD), ExOne (XONE), Stratasys (SSYS), and Organovo Holdings (ONVO); these firms range in market cap from $400 million to over $5 billion. In addition to these pure play 3D printing firms, a couple of larger firms are also investigating 3D printing, including HP (HPQ) and 3M (MMM); there is currently a lot of commercial interest in 3D printing.
A Consumer 3D Printer
3D printing has been around for a long time but the technology is still advancing, and with some key patents set to expire in 2014 it should see more competition and falling prices. At present, low cost printers can be had for as little as $400. Unfortunately, printers at this price point just aren't that good, and somebody buying a printer at this price and expecting it to produce anything like the higher end printers will come away sorely disappointed. Currently, you need to spend over $2000 for a printer that can produce impressive results, a price point too high for many households. The quality and prices of printers should fall rapidly in the next couple of years as the market grows, it's projected to triple by 2018, bringing it more in reach of the average consumer.
When the quality and price is at a level that the average consumer can afford, will there be a rapid change in behavior with people printing out all manner of items causing shopping centers to suffer? This seems, on the face of it, a difficult question to answer, but in fact we already have a couple of established products that can inform us about consumer behavior in respect of this opportunity.
Home based production
There are two examples that can shed light on consumer behavior in this space:
The humble bread maker - as of today, everyone is able to purchase a home bread maker that will produce a delicious freshly baked loaf that will fill their home with a lovely smell of home-baked-bread. In a way it is 'printing' a loaf of bread; feed in the ingredients, put it in a box, much like a 3D printer; press a button, then return in an hour or two for a fresh loaf of bread. These products, while reasonable sellers have never really caught on with the public; it is more of a novelty item -- it takes time and costs more than a loaf from the store. The baker, understandably nervous, managed to survive this change in technology.
The second example is the standard printer - a very mature technology that achieved success and made it into virtually every American's home. Armed with this printing press in homes why did it not kill off the print industry overnight? Wouldn't it be much nicer to wake up in the morning, press a button and have a newspaper freshly printed? Why when wanting to purchase a copy of car monthly, or whatever magazine you prefer, do I have to walk to the shop and buy a copy rather than just pressing a button and printing it?
As far as I know neither of these printing scenarios has ever been attempted, even though they do have practical advantages. The simple reason is the cost to print out a newspaper or magazine quality print would be many times the price of buying it from a newsstand. Add to this the typical home printer wouldn't have the speed or quality to match the store bought version, and it's clear why it was never attempted.
It's incredible really, by cutting out so much of the production: the newsstand, the distribution -- it still can't compete. With this in mind, are home printers ever going to compete with store bought products? From these two examples it seems unlikely, at least on any realistic time frame.
While this reality takes away a lot of the science fiction scenarios it doesn't really matter. The printer never did away with the printing industry, but it is a huge success, and a very profitable business -- it can be the same for 3D printers.
Enticing the consumer
Currently a 3D printer is not sitting on too many peoples' Christmas list. For this to change printers don't need to be able to zap out a new pair of sneakers at the press of a button, the bar can be set a lot lower. For a successful home 3D printer it simply needs to be good enough; if it can get to an affordable price point and printing capability, they should sell like hot cakes.
Throw in some simple software that would enable people to create their own products from templates and kids, especially, would love it -- just imagine how much fun kids would have designing, then printing out their own monsters.
These kinds of simple, yet fun, functions will drive the average consumer to pick up a 3D printer, and as the technology matures, more useful functionality will be available for home printing, which will further drive adoption.
As I've mentioned a couple of times, price and performance are vital. Manufacturers need to bring prices down much closer to an impulse buy and at this price level it has to produce reasonable results. If, using the previous example, the child's printed monster barely resembles the design on the screen, then he/she will not be happy. Currently the cheapest printers are around $400; realistically it needs to fall to around $200 to drive serious adoption. Comparing 3D printer ownership to Rogers diffusion of innovations, 3D printing is still at the innovators' stage with hobbyists making up the largest portion of home users. Only once early adopters get involved will we start to see some momentum.
Because of the technical difficulties and current early stage of adoption it will be a number of years before this makes serious in-roads for home use. We're probably at least 5 years away from this happening. While this seems a long time off, adoption rates are very difficult to predict and if the price falls faster than expected it could drastically alter this time frame.
The ultimate goal would be to see a 3D printer in every home; with the PC this took over 30 years to occur. I would argue that the pace of technical innovation and adoption is much more rapid today than during the birth of the PC in the 70s. Looking at smartphone adoption gives a recent example of a technology that was widely adopted in a much shorter time frame.
The other point to consider is the cost to print must be reasonable. If every time you want to print an item it costs over $10, then it will soon be consigned to the closet. Traditional printer manufacturers have not been great at this, as anyone who has used a printer well knows the biggest cost over its lifetime is the cost of ink, so I'm not convinced that they won't have the same strategy for 3D printers.
Size of the market
Looking at HP's most recent 10-K, it shows printing revenue for 2012 of $24 Billion -- this is made up of commercial and consumer printing, it doesn't break down individual percentages in the report. Add to this the other large printer manufacturers: Canon, Lexmark (LXK), Xerox (XRX), Seiko Epson, Samsung, and Brother Industries, and it all adds up to a very large market -- many times the size of the current 3D printing industry.
Of the companies listed, 3D Systems is the best positioned to take on this opportunity, it already has a line of 3D personal printers, which are aimed at the cheaper end of the market. There is no doubt that when the consumer space begins to take off, the larger traditional printer manufacturers will also aggressively target this market. 3D Systems will need to move fast to remain competitive.
3D printing has been around for many years but it hasn't really caught on with consumers. This is mainly because the cost and quality are out of reach of the average person.
With continued advances in the next couple of years a decent 3D printer should become much more affordable, and by simply adding a number of fun, creative applications it should be enough to tip the balance for a high percentage of households to buy one. Once this happens the home 3D printer could become as ubiquitous as the home printer of today.