As 3D Systems pulled out of the consumer market and Stratasys moved MakerBot production to Asia, a new “pack” of low-cost 3D printing market leaders has emerged by successfully catering to the needs of prosumers and enterprise level adopters. The latest Opportunities in Low-Cost 3D Printers: Technologies, Materials and Markets 2016” new SmarTech report goes on to analyze who these companies are and why they have been able to succeed where larger ones have failed.
The main reason why the low-cost 3D printing market has been described by generalist media as “in shambles and doomed”, in spite of it being quite lively and healthy, is that the three major investors in the adoption of consumer 3D printing – industry leaders Stratasys and 3D Systems, along with China-based Tiertime (PP3DP) – have registered substantial losses in their consumer divisions during the course of 2015 and generally fell short of meeting sales target.
This has resulted in a general shift in policies, with the extreme case of 3D Systems pulling entirely out of it Cubify consumer 3D printing push. This does not mean that 3D Systems has entirely pulled out of the low-cost 3D printing segment. Its Cube Pro filament extrusion 3D printer is still on the market and is one among a selected few that can proficiently offer nylon 3D printing capabilities, something that is very well received by professional and SME’s.
Shortly thereafter Stratasys also pulled the plug on its US-based (Brooklyn, NY) MakerBot operations as it subcontracted out manufacturing of its entire MakerBot range. The only exception is Tiertime, which has responded to challenge in the consumer areas burt focusing more heavily on it and releasing a more consumer-ready platform (the UP Mini 2) to its UP line of affordable desktop 3D printing systems.
Coming from a strictly professional experience in the manufacturing sector, both 3D Systems and Stratasys made some errors in their strategy to address consumers, demonstrating a clear lack of understanding of low-cost 3D printing dynamics and of consumer technological markets in general. Seeking to implement an Apple-like business model, both companies sought to capitalize on the hype by offering systems with prices driven up by complex engineering and electronics, finalized toward elegant design and ease of use. At the same time they limited experimentation and modifications by implementing a partially or entirely closed materials and software system.
In the end both of these approaches made the systems more difficult to operate instead of easier, with MakerBot’s Smart Extruder common malfunctions being the most representative icon to describe this idiosyncrasy. Both approaches also proved to be strategically wrong, as desktop 3D printer adopters – both professionals and makers – valued materials selection, affordability and reliability more than plug&play functionalities and aesthetics.
SmarTech Report on Next Gen Leaders
SmarTech reports that, at the same time, a new generation of industry players has been rising to cater to the real demands of the low-cost 3D printing industry. They are lead by Netherlands-based Ultimaker. The Dutch company has ultimately picked up the role of market leader in this segment by offering a family of 3D printers that are relatively affordable, sufficiently reliable and able to meet the basic desktop 3D printing demands of both makers and professionals. This has resulted in sales of over 27,000 units in 2015 and a market share of just over 10%.
A similar success was enjoyed by Taiwan based XYZ Printing, following a diametrically different interpretation of Stratasys’ and 3D Systems’ failing strategies: instead of a relatively pricey and stylish 3D printer with open materials like Ultimaker, it focused on an ultra-low cost machine (sub $1,000) with a closed materials system. A number of other companies has followed suite, offering even better performances in terms of reliability and materials compatibility, at a price below, or just over, $5,000.
The reason why a perceived market failure by large industrial manufacturers is, in fact, a huge market success for new companies is easy to understand. While a company like Stratasys needs to sell at least 100,000 MakerBot 3D printers a year to meet its revenue targets, a smaller company would have a hard time catering to a demand of 10,000 3D printers a year. This is why 3% market share is a huge success for a company like Aleph Objects (undoubtedly a rising star in the US market) and a 7% market share is a huge failure for MakerBot and 3D Systems. The low-cost 3D printing industry belongs to the smaller players and the proof is that the market is becoming more fragmented instead of consolidating into the hands of fewer large companies.
Along with Ultimaker there were a number of companies that have experienced double and triple digits growth in 2015. These, as seen above, are mostly manufacturers of thermoplastic extrusion based systems, with a few notable exceptions. With an estimated market share of 1.89% (due to its sales being mainly confined to the European continent in 2015) Poland-based Zortrax has been one of the most successful ones, offering a highly reliable 3D printer at an affordable price (around $2,000) and a partially closed materials system.
Several other brands have also stood out in 2015, including Aleph Objects, Leapfrog, Flashforge, Airwolf3D, TypeA Machines, Afinia, Robo 3D, with some other newer players such as Roboze, Fusion3 ad 3ntr coming in 2016. They were able to successfully cater to professional and prosumer end-users demands. Formlabs is currently the only company offering a phopolymerization-based system in this price category. The former MIT startup now holds a market share of 3.5% and has sold 9,700 3D printers, which – as the company’s Head of Customer Development & Services, Luke Winston once said, “is very likely to be more than all other SLA 3D printer manufacturers combined”.
A Materials World
According to the SmarTech report on low cost 3D printers, one of the reasons why this market remained so vibrant in spite of the many challenges it faced is because of its widespread open materials policy, with significant new business opportunities still expected to present themselves both in the thermoplastic and binder jetting powder markets over the next decade.
In 2015 the market for filaments was estimated to be worth $194 million, up 56% compared to the previous year. With the addition of an estimated $10.2 million from photopolymer 3D printing materials (up 142%), the entire low-cost 3D printing materials market was worth $204 million. It is expected to grow more than twenty-fold to $4.5 billion within the next ten years. Even then the great majority (84%) of low-cost 3D printing materials will be thermoplastic filament based, however binder jetting and thermoplastic powders will begin to represent a more significant share of the pie (2.8% and 3.5% respectively).
Further opportunities will arise for low-cost 3D printing both in terms of materials and hardware as more industries become adopters. These include both current adopters, such ad educational institutions, and future high value adopters, including the aerospace and automotive sectors.
A particularly virtuous example of this trend is the recent adoption of Ultimaker 3D printers by IT giant Siemens to create PLA casting molds for the rapid and low-cost casting of stainless steel components. SmarTech expects that low-cost 3D printers, within the reach of even the smallest of businesses, will unlock similar business model innovations through their ability to allow manufacture of components and prototypes in a scalable and cost effective way without the need for large capital investment. Those companies that will be able to meet this demand are going to be leading the next decade of low cost 3D printing evolution.