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Summary

  • A 3-D printer lets people create custom looks for home-centric robots like the upcoming $1,600 Jimmy the Robot product from Intel.
  • Google is also interested in consumer robotics.
  • 3D Systems has a potential source of revenue growth from Intel and Google’s moves to popularize affordable smart robots.

3D Systems (NYSE:DDD) is again below $62 after reaching as high as $69.56 last week. Takeover rumors and short covering may have helped the stock reach near the 70 level. I am hoping the company can go back near the $67 price target that Jefferies made when it upgraded DDD to a Buy.

(click to enlarge)

Source: Google Finance

I disagree with Citigroup's assessment that 3D Systems' high valuation already makes it an unlikely takeover target. Any company that wants immediate leadership position in additive manufacturing is better off acquiring 3D Systems, rather than develop in-house 3-D printing products.

Furthermore, my long-term outlook is that 3D Systems can still thrive as an independent firm. Eleven companies tried to buy Facebook (NASDAQ:FB) but Zuckerberg rejected them all.

DDD investors should remain faithful and let the future decide. 3-D printing companies have high valuations today precisely because many investors believe that additive manufacturing has the potential to become widespread like social networking.

Intel And Google Helps Robotics and 3-D Printing

Intel (NASDAQ:INTC) is scheduled to release a $1,600 robot this coming September. Jimmy the Robot will be the first model to launch from Intel's open source robotics initiative. 3-D printers helped designed the early prototypes of Jimmy. People who buy this two-foot tall robot from Intel can use 3-D printers to customize the looks.

Intel wants smart robots to be affordable to be more attractive to consumers. Socially interactive robots like Jimmy may become as ubiquitous as household pets in the future.

As a citizen of the Philippines, I am also open to robots helping the millions of domestic helpers that my country exports to other countries.

The future house robot will not only be a pet to amuse its owners. I look forward to seeing versions of Jimmy the Robot that can do multiple household chores.

Intel is pushing an apps-based approach to robotics to help people quickly install different functions for their robots. The robots of the future will not only be limited to just one purpose like the iRobot Roomba.

Google (NASDAQ:GOOG) (NASDAQ:GOOGL) is also interested in consumer robotics. Google's purchase of DARPA-funded Boston Dynamics and other robotics companies is another nod to the futurist claim that robots may become as common as smartphones and smart TVs. App developers can easily make robot-specific programs as easily as they make apps for Android phones now.

Google's tremendous success with Android OS is due to sales of cheap Android phones and tablets. I expect the search giant company to also champion open source, affordable house robots.

Intel and Google are investing on robotics because people will eventually adopt smart robots usage as easily as people buy smartphones and tablets now for their everyday need.

The Benefits To 3D Systems

3D Systems, as a leader in additive manufacturing, will be one of the beneficiaries in the rise of house robots. Intel is using 3D Systems software to help people scan objects in 3D via Intel's RealSense technology. I look forward to Intel promoting 3D Systems products bundling with future Jimmy the Robot kits.

3D Systems is already a partner of Google in the Project Ara modular phone venture. Google will likely tap 3D Systems again to help it come up with modular and customizable house robots.

3D Systems has a strong lead in direct metal printing with Phenix. Google and Intel-made robot kits will not remain in pure plastic forms. The military and industrial firms will need robots for heavy-duty services.

InMoov is another open source initiative that provides open source 3D-printable robot kits. There will be robotics enthusiasts who might Cubify printers to create modifications of Intel's Jimmy the Robot and inMoov. Consumer 3-D printers of today are also getting cheaper.

3D Systems may not offer sub-$500 printers now. However, Abe Reichental will have to come up with more affordable Cubify versions if he wants his company to earn more money from the consumer sector. There will come a time when people will not only be printing custom phone covers with Cubify. The future promises the prospect of people 3-D printing custom parts for their Intel or Google-made house robots.

Conclusion

The additive manufacturing industry will gain more mainstream adaptation because of Intel and Google's support for robotics. 3D Systems will be one of the biggest beneficiaries of the coming rise of affordable and customizable house robots.

The Age of Smartphones will eventually evolve into the Age of Smart Robots. Intel processors and Google's Android OS ecosystem will not remain exclusive to PCs, phones, and tablets. The Internet of Things also includes the promise of web-connected intelligent robots.

I remain long in DDD and it is the only 3-D printing stock I am betting on. I admire 3D Systems' management and support the company's acquisition-fueled approach to growth.

I agree with the Buy recommendation for DDD made by 10 analysts at BarChart.

Source: 3D Systems Can Benefit From Home Robotics