The declining cost of 3-D printers has led to enthusiastic and widespread adoption among the medical, aerospace, automotive parts, jewelry, and even apparel industries, to name just a few. The two largest players manufacturing made-to-order objects are 3D Systems Corporation (NYSE:DDD) and Stratasys, Ltd. (NASDAQ:SSYS).
The recent surge of enthusiasm for accretive printing from the fast-rising proactive consumer, or “prosumer,” market segment has resulted in impressive gains for both companies. Stratasys increased shareholder value by 131.6% last year, while 3D Systems has seen its market cap grow by a staggering 700% over the past three years.
The market has a very low barrier to entry. Made-to-order mail-order communities such as Shapeways have thrived, locking in an impressive 66.6% increase in consumer orders from December 2011 to January 2012. Crowdsourcing websites such as Kickstarter have also accelerated the commercial development of 3-D start-ups. Even Staples, Inc. (NASDAQ:SPLS) now offers its customers 3-D printing services on Mcor’s IRIS 3-D printer.
So even if 3-D printing is the future, it remains to be seen if Stratasys or 3D Systems will be the companies to shape that future. A single technological breakthrough may translate into an enduring competitive advantage and market dominance.
Stratasys, Ltd. (NASDAQ:SSYS)
Stratasys engages in the manufacture, development, marketing and servicing of rapid prototypin devices, including 3-D printers. Stratasys’ emphasis in the 3-D market is primarily on its industrial customers. On April 16, 2012, Stratasys announced that it intended to merge with Objet, a leading manufacturer of 3-D printers based in Rehovot, Israel, in a merger that has made Stratasys the single-largest player in the 3-D industry. Below is a table summarizing both the operating and tax synergies resulting from the merger.
Stratasys relies on its numerous value-added resellers, distributors, and a large commercial and industrial client base to drive profits. The company’s range of 120 3-D printing materials is the widest in the industry and includes more than 100 proprietary inkjet-based photopolymer materials and 10 proprietary FDM-based thermoplastic materials. Stratasys’ cheapest model is the $9,900 Mojo 3-D Printer, developed for the rapid industrial prototyping market.
3D Systems Corporation (NYSE:DDD)
On the other end of the spectrum is 3D Systems. The company’s top-line growth relies on a mix of mid- to high-end corporate customers in the medical and aerospace industry, and a corresponding expansion of the consumer print-on-demand space. The Cubify 3-D printing system is aimed directly at the mainstream DIY market, with an introductory price of only $1,299. 3D Systems offsets this lower entry price by raising the price of its proprietary ABS cartridges. 3D’s proprietary ABS CubeX cartridges are priced at $100 each, roughly twice the price of MakerBot’s spools. The sale of these materials currently accounts for 40% of 3D Systems’ revenue and is currently one of 3D Systems’ fastest-growing segments.
Source: 3D Systems Investor Relations.
