The disruptive potential of 3D printing is no longer potential. The news of the first publicized 3D printing of a firearm, the Stratasys, Ltd. (NASDAQ:SSYS) partnership with Scheu Dental to produce dental appliances, and the announcement that Staples, Inc. (NASDAQ:SPLS) will sell the Cube 3D Printer from 3D Systems Corporation (NYSE:DDD) in June, tell us that the new world has arrived.
3D printer manufacturer Stratasys, Ltd. (NASDAQ:SSYS) reported revenue from products and services that more than doubled in the first quarter from $45 million the year previous, up to $97.2 million this year. However, because of the acquisition of Objet, an Israeli competitor, in December, net income was a loss of $15.5 million, or $0.40 a share. The loss is nothing to be worried about and is, if anything, a good sign of things to come for the company.
The same impressive growth in sales and revenue was seen at 3D Systems Corporation (NYSE:DDD) in the first quarter. The company saw revenue grow 31% to $102.1 million. Printer sales were up 81% from the year previous. GAAP net income jumped 43%.
3D printing, more properly called additive manufacturing, is starting to change many industries. Recent earnings and acquisitions prove it.
Just how disruptive will 3D printing be?
Picture any major manufacturer that has outsourced or shipped jobs out of the U.S. to a cheaper country. We will call this company Acme. Acme had a plant in the U.S., but shipped jobs to Vietnam several years ago to take advantage of lower wages. Acme makes light switch faceplates. But they aren’t just any faceplates, they are custom, fancy faceplates with their own special invisible screws that disappear into the faceplate and wall. These screws are also made in Vietnam, and they ship with the product. If a homeowner accidentally loses a screw during a home makeover project, it can take weeks for them to place the order online, and wait for it to ship from Vietnam. Acme’s high-end customers do not care for this. They believe it is unacceptable to have a light switch faceplate missing from the wall for that long.
Enter the 3D printing solution. Thanks to 3D Systems Corporation (NYSE:DDD) and Staples, Inc. (NASDAQ:SPLS), for just $1,300, anyone can purchase a 3D printer, take it home, and print whatever they want.
Acme’s high-end customers are people who can afford a home use 3D printer — or go to Staples and use the 3D printer in the store. All they have to do is visit the Acme website, and download the schematics of the special screw, and print. Just a few hours later, as compared to weeks later, the screw is printed, and put in the faceplate.
Acme has tremendous success with the 3D printer method. So much success in fact that it no longer sees the need to produce the extra screws in Vietnam. Why not skip all of the manufacturing supply chain, and just sell faceplates and screws as schematics? Customers could buy the schematics instead of the physical product, and print it at home.
Unrealistic? Or the future?
The cost of machining and manufacturing the actual 3D printers themselves is decreasing, and along with it, the retail sales price. As the printers get within the grasp of the mass-market, the products as schematics sales model will begin to take hold.
The 3D printing industry brought in $2.2 billion in global sales and services in 2012, an increase of 28.6 % over the previous year. That number is expected to rise to $6.5 billion by 2019.
Many experts believe that 3D printing has the potential to change the way we do not just business, but the way we live and operate our daily lives, in the same way that the Internet, the personal computer, and mobile handheld technology have.
In a very plausible scenario where consumers can just print much of what they need at home, and not go to the store, it reduces not only the need for manufacturing plants whether they be domestic or international, but retail stores as well. There are environmental factors as well: less shipping, less driving, less waste, and less pollution.
The number of potential dramatic changes to society are staggering.
But with great power comes great responsibility, and greater chances for abuse of that power. There is no telling what consumers will want to print, or what demand will arise first. The publicizing of the first firearm is evidence that the technology won’t always be used to make faceplates, screws, or a full set of dentures, or hearing aids.
It is inevitable that with this boom in technology that regulations will follow. The U.S. State Department already has intervened and demanded that the group that printed the firearm and publicized it pull down the plans, after 100,000-plus people downloaded the plans for the firearm.
It won’t just be a public safety issue. In fact, this is a minor issue. In the same way that a run of the mill, home use scanner and photo editing software are all designed to recognize legitimate currency, and not allow it to be printed or edited, 3D printers also have the capability of being programmed to not print a firearm or other weapon.
The bigger issue is intellectual property and copyright infringement. The unfortunate potential for counterfeiting is significant. Not to mention product liability when a consumer makes the product according to manufacturer’s specs, but is injured. Who will be to blame?
The future is here
The future is simple and obvious. 3D printing will change the world. For the next few years these early manufacturers will see their numbers go up and down as they make acquisitions, build new plants, and experience growth pains. But they will inevitably succeed and be as solid and integral to our society as 3M Co (NYSE:MMM) or International Business Machines Corp. (NYSE:IBM) are to us. The question is when do you plan to take advantage of that knowledge and invest in the future? Now or after their stock prices have increased again?
The article 3D Printing Earnings Predict the Future originally appeared on Fool.com and is written by Erin McBride.
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