A material salvo in this direction was shot in this direction late last month, when HP indicated that it was about to enter the 3D printing market. Despite what appears as a bit of a public relations mis-step (it is reported that HP CEO Meg Whitman first stated that the announcement would come in June, but corrected herself a few days later in a blog post, stating that the announcement would come only by the end of the company’s fiscal year, October 2014, here), the upshot is the same—HP appears to be determined to enter the 3D printing field. Few details have been given about what HP is really up to in the run-up to its October 2014 launch. Morsels of information have focused on the claim that HP has finally solved a number of unspecified technical issues as well as a declaration that the first market of interest will be the enterprise market. Against this, a particularly interesting attempt to explain the what and why of HP’s announcement appeared on 28 March on Forbes.com, “Why is HP Entering the 3D Printing Industry?”, here.
According to the piece, the primary reason why HP is entering the 3D printer market "is because a host of core patents such as apparatus for producing parts by selective sintering have either expired or are expiring within a year.” Followers of the industry are aware of this and there have been various views on whether this portends a patent cliff, at least for the incumbents. From the Forbes.com perspective, the effect of the expiry of this first generation of patents seems to be that HP can cherry-pick the information soon to enter the public domain and to leverage its advantages to better exploit this soon-to-be freely available technology (more on this point again below), without having to commit massive R&D funds in this direction. Whether this is so, or whether the patent landscape will more be incremental than that, remain to be seen. Be that as it may, the Forbes.com article also suggests that, together with the expiry of these so-called core patents, HP has made significant progress in reducing the cost of consumables (it should be remembered that the materials to be used in the 3D manufacturing process, and the “razor-blade” business model that is inherent in the sales of these materials, are too often overlooked though commercially central to the 3D industry). As well, HP is reported to have progress in the quality of the additive “print” output as well reducing the printing time, which makes 3D printing less attractive for more batch-like manufacturing.
here, whereby it is not usually the technological pioneer that ultimately succeeds commercially, but rather the company with manufacturing, marketing and distribution clout. Of course, given the fact that the first generation of patents is reaching expiry, it is a bit of an analytical stretch to refer to 3D Systems and Stratasys and their ilk as freshly-minted pioneer innovators. In any event, whether the presence of HP will give more “gravitas” to the entire industry remains uncertain.
Secondly, Forbes.com points to HP’s “deep pockets”, which “can easily fund any R&D to improve future processes or ink (plastic filament), which costs anywhere between $25 to $45 for a kilogram depending on the quality and manufacturer.” Here, too, whether the mere fact that HP has deeper pockets than smaller rivals such as 3D Systems and Stratasys has not heretofore enabled HP to take a lead role in the 3D printing industry. It is one thing to have the financial means to fund research, but it is quite the opposite to be certain that such R&D will translate into solid and stable national growth. Thirdly, as mentioned above, HP is placed to exploit its distributional channels and other complementary assets, at least in the enterprise space. Finally, even if materials continue to constitute a lucrative part of the 3D printing field, the ability of HP to migrate from its prominent position in the traditional 2D printing world to the quite different requirement of the 3D printing environment is also still an open question (interestingly, a recent radio interview with a fund manager devoted solely to the 3D printing industry failed to mention the HP announcement at all).
Indeed, an early indication whether the mere announcement that HP will enter the 3D printing area will be good for the entire industry can be measured by the direction of the stock price of both 3D Systems and Stratasys since the initial announcement by HP CEO Meg Whitman on 20 March 20. As can be seen from the attached, here and here, the stock prices for both companies have notably declined at the time of the original HP announcement and have wandered even a bit lower since then. Whether this decline is due to the HP announcement or to other factors remains an open question (indeed, the fund manager interviewed seemed to suggest that analysts have been down on the entire 3D printing industry lately and this has affected share prices). Still, the decline is food for thought. The ability of these companies to continue to dominate the industry in the face of HP’s announced entry will no doubt be the subject of intense continued interest for a long time to come.