3D Printer Market Disappoints in The 1st. Quarter of 2015

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3D Printer Market Disappoints in The 1st. Quarter of 2015

 news 2015-04-23 at 11:45:25 am Views: 586
  • #42401

    3D Printer Market Disappoints in The 1st. Quarter of  2015
    By Alec

    As the 3D printing community entered the new year on a wave of innovative ideas and interesting products from late 2014, the future seemed very bright in January of 2015. The International CES was also very kind to lovers of 3D printers, but all that optimism has slightly ebbed away as the results of the first quarter of the year are coming in. In fact, it appears that the worldwide 3D printing market (though most data is from North America) has not done as well as many people expected.

    This result was slightly expected, especially as we learned of the announcement that Makerbot has failed to hit certain economic targets and is forced to close down its three retail stores and lay off a fifth of its personnel. As Brian Deagon over at investors.com clarified, the market for 3D printer slowed down near the end of the first quarter. Not only is this apparent from the much more aggressive sales tactics and creative financing used in the last couple of months, but also from feedback from 3D printing resellers.

    The feedback is especially telling. Piper Jaffray, a U.S. investment bank and asset management firm, got in touch with 62 3D printing resellers of printers and 3D printing service bureau operators (of which 82% were in North America), and all reported a similar picture. Piper reportedly asked resellers about their sales cycles , and about sixty percent of participants reported that sales have remained stable. While not sounding too bad, the last quarter of 2014 reported a stability of 68% and the quarter before that clocked in at 70%. ‘Total system sales in the March quarter were a bit discouraging compared to prior periods, with 23% of surveys responding with an above-plan quarter vs. 35% indicating they were below plan, which produced a net negative of 12%," Piper analysis Troy Jensen wrote.

    The two biggest manufacturers of 3D printers, Stratasys and 3D Systems, also haven’t been doing very well on the stock market. On yesterday’s market, stock of 3D Systems stock was down 4.2%, near 31.13. Stratasys, meanwhile, was tradigin near 53.46, down approximately 5%. However, the survey by Piper was more positive about Stratasys than about 3D Systems. ‘Regarding 3D Systems, demand was once again poor, and the story remains the same with resellers unhappy with the company's channel management and product demand,’ Jensen wrote. He has a neutral rating of both, with Stratasys stock with a price target of 64 and 3D Systems of 32. Both companies unsurprisingly missed previous estimates for revenue and earnings.

    So what’s going on in the 3D printing market? As you might recall, MakerBot’s misfortune was attributed to overly optimistic estimates about growth opportunities and that is basically what seems to be going on across the market. Growth can definitely be seen, but 3D printers aren’t catching on at the rated that was expected, while the existing market is becoming saturated. 3D Systems in particular also happens to suffer from production delays and reports of mismanagement. Jensen further added that demand is also suffering from price increases and competition from low-end 3D printers. Perhaps the time has come for 3D printing businesses to stop reckless expansion?