I'm a long time investor in both SSYS and DDD/TDSC. One thing puzzles me and I was wondering if anyone has any ideas. It seems odd to me that consumable revs are not growing at a faster rate than they are. My assumption is that when users first get their systems, they are tentative in their usage until they get more comfortable with the new technology. It seems to me that after a while as they get more comfortable and find new ways to utilize the technology that their consumables usage would ramp up pretty considerably. Combine this with a trend towards larger build platforms and manufacturing as well as just prototyping and it seems that the consumables revenue growth rate should be higher than it is. I realize that new systems are probably accompanied by initial stocking orders for consumables and that new users may waste material in their first few weeks of operation but it still seems to me that a system in place for a year would be using two or three times the consumables when compared to a recently placed system. I welcome any serious thoughts and comments. - Thanks
Although Stratasys went public in the mid 90's and 3D Concepts has been around since the 1980's, 3D printing as a manufacturing and hobbyist tool is still in its infancy. The early Hewlett Packard printers- including printer ink- were extremely expensive, and this didn't change until they became adopted by the masses and prices dropped dramatically.
Many businesses, like architecture firms and automobile manufacturers are now using 3D printers, but they're printing one prototype at a time as need be and watching their expenses, as resins, plastics and metal costs ad up.
As 3D printers become more widely used, and and numbers of people using them increase exponentially, economies of scale will kick in, prices will drop, and residual income from consumables will increase dramatically.
A large, seasoned installed base of printers should generate a rather predictable, steady run-rate of consumables use. The growth comes largely from new machines placed. So in a healthy market, one should expect the growth rate of consumables to approximate the growth rate of new systems placed. So 30% growth seems right. Plus, you have to remember that the MakerBot folks have not disclosed their consumable economics, therefore you can surmise that their gross margins are much lower than SSYS and Object consumables.
could you shoot the consumable figures you have at us? It is something worth watching. Paper printers are now given away while the Cartridges are where the money is. Wonder if that is the, way out in the future, model for 3d as well.
Let's not start giving them away just yet. Thanks to both for your replies. I'm looking for at least a few good years of making high margins from consumables before they start getting commoditized. Even then newer and or specialized materials should be ab;e to continue to command higher margins. Stay tuned.