Will 2013 be the year of 3D printing?

A new report from SmartTech Publishing available from NanoMarkets

The report 3D Printing Markets: Hope, Hype and Strategies from SmarTech Publishing is available for purchase via the NanoMarkets website at www.nanomarkets.net or by sending in the attached order form to our offices via scan and email at sales@nanomarkets.net or via fax at 804-360-7259.

3D PRINTING MARKETS HOPE HYPE AND STRATEGIES This report pinpoints where the real opportunities will be found in the emerging 3D printing sector. Readers of the report will find an application-by-application assessment of the opportunities for 3D printing including comprehensive and granular ten-year forecasts of hardware, software and services. The report also contains detailed profiles of leading firms to watch in the 3D printing space with SmarTechs assessment of their strategies and business models. The report also analyzes where there are gaps in the market that could be filled by start-ups and how established rust belt manufacturers are likely to react to the rise of 3D Printing. The objective of this report is to provide essential input to senior executives making marketing, business development and investment decisions in the rapidly evolving 3D printing business: 3D printer and scanner firms will better understand which applications represent true opportunities and which are just hype. Furthermore, where this report identifies new sources of business revenue it also provides guidance on market evolution and timing CAD firms, software companies and service bureau will gain insight into where they can seek new addressable markets in the 3D printing space and how they should develop their business models over next decade Potential end users of 3D printing throughout industry will increase their knowledge of where 3D printing is expected to advance revolutionary change and where it is expected to be merely a useful tool. In addition, they will come to understand the capabilities of state-of-the-art 3D printing and how those capabilities will increase over the coming decade.

This report provides a roadmap for 3D printing technology that will be invaluable to product managers of all kinds and its scope extends to all serious applications and end user sectors that have been proposed for 3D printing to date. Table of Contents Chapter 1: Business Strategies for the 3D Printing Industry 1.1 Is 3D Printing Really a Disruptive Technology? 1.2 Successful Strategies for 3D Printer Companies 1.3 Emerging Software Strategies for the 3D Printing Industry 1.4 3D Printing Service Bureau Strategies 1.5 Key R&D Trends in 3D Printing and Additive Manufacturing 1.5.1 Consortium Organizations

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1.5.2 Academic and Government R&D 1.5.3 Technology Roadmap 1.6 Current and Future Financing Patterns for 3D Printing Businesses 1.6.1 Traditional Sources of Finance: Venture Capitalists and Investment Banks 1.6.2 Role of Strategic Investments 1.6.2 Will Crowdsourcing Play a Role in the Future of 3D Printing 1.7 Supply Chain/Marketing Channel Evolution for the 3D Printing Industry 1.7.1 3D Printing Clusters and Clouds 1.7.2 3D Printings Potential Disruption of Existing Supply Chains 1.8 3D Printing: A Threat to the Traditional Machine Tool Industry 1.9 Materials Strategies and Evolution for 3D Printing 1.9.1 Novel Plastics and Metals 1.9.2 Composites 1.9.3 Ceramics 1.10 Intellectual Property as a Factor in 3D Printing 1.10 Ten Firms That Will Shape the Future 3D Printing Business 1.11 Major Barriers to Adoption for 3D Printing 1.12 Key Points Made in this Section Chapter 2: Revenue Generation: Emerging and Established Markets for 3D Printing 2.1 Generic Advantages and Disadvantages of 3D Printing Manufacturing 2.2 Future Evolution of 3D Printing: Home Brew to Small-Scale Manufacturing 2.2.1 The Maker Movement and the Firms that Supply It 2.2.2 Homebrew/Small-Scale Manufacturing: Current and Future Printer Needs 2.2.3 Growing Use of Additive Manufacturing in Less Developed Nations 2.2.4 Ten-Year Forecasts of Revenues from Home Brew/Small-Scale 3D Printing 2.3 Rapid Prototyping and Rapid Manufacturing 2.3.1 Printers for Rapid Prototyping/Rapid Manufacturing: Suppliers and Products 2.3.2 Rapid Prototyping and 3D Printing 2.3.3 Rapid Manufacturing of Spares and Replacements 2.3.4 3D Printing and Die Making 2.3.5 Ten-Year Forecasts of Revenues from Rapid Prototyping/Rapid Manufacturing 2.4 General Industrial Applications for 3D Printing 2.4.1 Aerospace 2.4.2 Automotive 2.4.3 Building and Household Products 2.4.4 Furniture 2.4.5 Clothing and Footwear 2.4.6 Consumer Electronics 2.4.7 Toys and Dolls 2.4.8 Jewelry, Art and Musical Instruments 2.4.8 Other 2.4.9 Ten-Year Forecasts of Revenues from General Industrial Applications 2.5 3D Printing in the Food and Restaurant Industry 2.6 Medical and Dental Applications for 3D Printing 2.6.1 Special Materials for Medical and Dental Applications 2.6.2 Ten-Year Forecasts of Revenues from Medical, Dental and Pharma 2.7 Educational Applications for 3D Printing 2.8 Architecture and Design 2.9 3D Printing for Military and Police Applications 2.9.1 Ten-Year Forecasts of Revenues from Military and Police Applications for 3D Printing 2.10 Emerging and Future Applications

2013 SmarTech Markets Publishing

2.10.1 How Far Can We Take 3D Printing: The Myth of the Printed Remote 2.11 Key Points Made in this Section Chapter 3: 3D Printers: Technology and Product Evolution 3.1 Industrial-scale 3D Printers 3.1.1 Core Technologies and Future Product Evolution 3.1.2 Key Suppliers and Products 3.2 3D Printers for Makers and Hobbyists 3.2.1 Core Technologies and Future Product Evolution 3.2.2 The Future of Open Source in 3D Printing 3.2.3 Key Suppliers and Products 3.3 3D Printers for the Home 3.3.1 Core Technologies and Future Product Evolution 3.3.2 Key Suppliers and Products 3.4 Specialist 3D Printers for Medical and Educational Applications 3.5 3D Scanners and Scanning Technology 3.6 3D Printer/Additive Printing Equipment Pricing Trends 3.7 Ten-Year Forecasts of Revenues from 3D Printers and Scanners 3.8 Key Points Made in this Section Chapter 4: Software and Services Opportunities in 3D Printing 4.1 Evolution of 3D Printing File Formats 4.2 3D Printing and Scanning Service Bureaus 4.2.1 Entry of large firms into the 3D Service Bureau Business 4.2 3D Design and Modeling Software 4.2.1 Solid Modeling CAD 4.2.2 3D Computer Graphics 4.2.3 Scanning Software 4.3 Ten-Year Forecasts of Revenues from 3D Printers and Scanners 4.4 Key Points Made in this Section Acronyms About the Author List of Exhibits: Exhibit 1-1: Numbers of 3D Printers Shipped and Installed Exhibit 1-2: Summary of Ten-Year Market Forecasts of 3D Printing Markets by Type of Product ($ Millions) Exhibit 1-3: Summary of Ten-Year Market Forecasts of 3D Printing Markets by Application ($ Millions) Exhibit 1-4: 3D PrintingBenefits, Challenges and Opportunities Exhibit 1-5: 3D Printing: Long-Term Market Expansion Possibilities Exhibit 1-6: Inherent Limitations of 3D Printing and Likely Progress in the Future Exhibit 1-7: Current and Future Role for 3D Printing in Customization Exhibit 1-8: Key 3D Printing Service Bureaus Exhibit 1-9: Recent Venture Capital Investments in the 3D Printing Sector Exhibit 1-10: 3D Printing Channel Evolution Exhibit: 2-1: Selected Firms that Supply the "Makers" Exhibit 2-2: Ten-Year Forecast of 3D Printer Equipment and Services in the Home/Makers Sector Exhibit-2-3: Rapid Prototyping Using 3D Printing: Examples from Industry Exhibit 2-4: Notable 3D Printing Firms: Manufacturing Sector Strategies

2013 SmarTech Markets Publishing

Exhibit 2-5: Ten-Year Forecast of 3D Printer Equipment and Services in Other Rapid Manufacturing and Prototyping Exhibit 2-6: Main Opportunities for 3D Printing in Automotive Applications Exhibit 2-7: Ten-Year Forecast of 3D Printer Equipment and Services in the Automobile Industry Exhibit 2-8: Main Opportunities for 3D Printing in Aerospace Applications Exhibit 2-9: Ten-Year Forecast of 3D Printer Equipment and Services in the Aerospace Industry Exhibit 2-10: Main Opportunities for 3D Printing in Medical Applications Exhibit 2-11: Ten-Year Forecast of 3D Printer Equipment and Services in the Medical Sector Exhibit 2-12: Main Opportunities for 3D Printing in Education Exhibit 2-13: Ten-Year Forecast of 3D Printer Equipment and Services in the Education Sector Exhibit 2-14: Main Opportunities for 3D Printing in Architecture, Construction and Design Exhibit 2-15: Ten-Year Forecast of 3D Printer Equipment and Services in the Construction and Architectural Sector Exhibit 2-16: Main Opportunities for 3D Printing in the Military Exhibit 2-17: Ten-Year Forecast of 3D Printer Equipment and Services in the Military Exhibit 2-18: Ten-Year Forecast of 3D Printer Equipment and Services in "Other" Sectors Exhibit 3-1: Selected Specialized 3D Printers for Niche Applications Exhibit 3-2: Selected 3D Scanner Technologies Exhibit 3-3: Selected 3D Scanners and their Capabilities Exhibit 3-4: Ten-Year Market Forecasts of 3D Printers by Application ($ Millions) Exhibit 3-5: Ten-Year Market Forecasts of Scanners for the 3D Printing Market by Application ($ Millions) Exhibit 4-1: Notable 3D Printing Bureaus Worldwide Exhibit 4-2: Selected Companies Providing 3D Scanning Services Exhibit 4-3: Ten-Year Forecast of 3D Printer Equipment and Services in Service Bureaus Exhibit 4-4: Ten-Year Forecasts of 3D Printing Service Revenue by End User ($ Millions) Exhibit 4-5: Selected Design/Modeling Software Packages Used in the 3D Printing Sector Exhibit 4-6: Selected Scanning Software Used With3D Printers Exhibit 4-7: Ten-Year Forecasts of 3D Printing Software by End User ($ Millions)

This analysis in this paper is extracted from a new industry analysis report published by SmarTech Publishing. The report 3D Printing Markets: Hope, Hype and Strategies is available for purchase via the NanoMarkets website at www.nanomarkets.net or by sending in the attached order form to our offices via scan and email at sales@nanomarkets.net or via fax at 804-360-7259.

2013 SmarTech Markets Publishing

Will 2013 be the Year of 3D Printing?

Will 2013 Be The Year of 3D Printing?

This analysis in this paper is extracted from a new industry analysis report published by SmarTech Publishing. The report 3D Printing Markets: Hope, Hype and Strategies is available for purchase via the NanoMarkets website at www.nanomarkets.net or by sending in the attached order form to our offices via scan and email at sales@nanomarkets.net or via fax at 804-3607259. Myth and Hyperbole in the 3D Printing Sector As Exhibit I shows, SmarTech continues to see considerable potential in the 3D printing market. Nonetheless, 3D printing has been a considerable source of industry hype in the past year. Unfortunately, we think this will tend confuse the marketplace and that there is a growing need for firms in the sector to refocus on what 3D printing can and cannot do in order to generate profits.

Exhibit I: The 3D Printing Market by Application, 2013-2022

20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2013201420152016201720182019202020212022 2013 SmarTech Markets Publishing Other Service Bureau Military Education Aerospace Medical Construction Automobile Home/Makers

This paper profiles some of the hyperbole and industrial myth making that has built up around 3D printing of late and provides some guidance on how this might be avoided in the future. A Solution to Deindustrialization: 3D Printing Conquers China 3D printing has been touted as a deep solution to the problem of de-industrialization of developed countries. Supposedly, this new kind of manufacturing once installed in American, European and Japanese factories will enable these countries to take back much of the manufacturing base that has been lost to China in the past decade. As an illustration of how far this trend has gone, 3D printing was mentioned in this context in a recent State of the Union speech by U.S. President Obama. A once-shuttered warehouse is now a state-of-the art lab where new workers are mastering the 3D printing that has the potential

US $ Millions

2013 SmarTech Markets Publishing

to revolutionize the way we make almost everything," Obama said, speaking of the National Additive Manufacturing Innovation Institute. The Next Technology Revolution: Makers 3D printing is also seen by some as the core of a new technology industry akin to the PC industry. The analogy here is supposedly that the so-called Maker movement is similar to the garage-based businesses that got the PC industry underway. In this mythology, young workaholic nerds together with hobbyists of all kinds will build a market for 3D printers that will be as important and ubiquitous as personal computers have proved to be. One recent book on 3D printing describes 3D printers as machines that can do almost anything, which also echoes the emergence of the PC as a highly multipurpose calculating machine. For those who see the Maker movement as a crucial movement, we are in the 1970s of 3D printing as it were. Coming to Wall Street and Bookstores Investors have also been quick to following the 3D printing trend. The few pure-play public companies in the 3D printing space have been the subject of major speculation in the past year, with the inevitable discussion of when the stock of firms such as 3D Systems and Stratasys should be bought and when they should be shorted. Boosting investors' sentiments in the 3D printing sector is the fact thatat the time of writingthese two companies have just issued extremely bullish guidance statements. Similarly, a slew of new popular books are appearing in book stores all touting the spectacular financial and business opportunities that the evolution of 3D printing will bring in its wake. 3D Printing: The Next Big Thing or the Next Big Bubble? All this makes for good magazine copy, but at SmarTech we also find it somewhat disturbing. 3D printing is not newit has been used in industrial prototyping for many yearsso there is good reason to ask why it is attracting so much attention at the present time. Unfortunately, we believe that the arguments that are being made for 3D being the proverbial next big thing have considerable similarities to those that were made for solar energy and telecommunications in the past. Both the solar energy and telecommunications sectors boomed for a few years and then went into rapid decline as revenue potentials were exaggerated and too many firms brought too many technologies on stream that overshot market needs in terms of performance. Yet solar and telecom continue to be areas where firms with a solid understanding of market opportunities continue to make money. These are the firms that understand (1) how to distinguish the hype from the true benefits provided by the technology and (2) the markets where those benefits could best be sold. SmarTech believes that in the current business environment, long-term business success will also be possible to those who understand the underlying economic and market realities of 3D printing. And it is worth pointing out that we foresee a successful future, not just for 3D printers themselves but also for scanners, software and 3D printing services. (See Exhibit II)

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Exhibit II The 3D Printing Market by Product Type, 20132022

20,000 15,000 10,000 5,000 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Services Software Scanners Printer equipment

2013 SmarTech Markets Publishing

The goal of SmarTechs market analysis in this field has been to make a contribution to the kind of strategizing that we believe will be necessary for the future growth of 3D printing. However, before turning to this, the following is an account of where we see weaknesses in some of the current claims made for 3D printing. 3D Printing Wont Save the Industrialized World To suggest that 3D printing can directly lead to a resurgence of manufacturing in (say) the U.S. has more than a hint of hyperbole about it. The reasons for and impact of deindustrialization are complex and controversial. Seeing 3D printing as a savior in this context seems a little nave. It is true that some manufacturing booms in history have often been bred out of one particular technology, but this is hardly proof that 3D printing could be a revolutionary technology in this sense. At best, it merely establishes that 3D printing could have a dramatic impact on the manufacturing fortunes of developed nations, not that it will have. The 3D Printing Sector is Not the PC Sector in the 1970s To compare 3D printing to the early computing industry is to miss the point that personal computing took off because there was apparently a huge pent-up demand for computing power in smaller organizations and even for individuals. The original killer app was the spreadsheet, which had multiple serious uses that people were ready to pay for. It is unclear to SmarTech that there is anything comparable to a spreadsheet that will drive the market for 3D printing. We therefore dont see it as a disruptive technology in the strict sense, despite claims to the contrary that often come (mostly) from outsiders to the industry. Much of the revenues generated by the 3D printing sector in the past decade have come from rapid prototyping applications. It is possible that 3D printing could be (or already is) disruptive within this narrow sector, but this isnt saying all that much. SmarTechs concern is therefore that the 3D printing industry may be thrown off track by some of what we see as illusory goals. We believe that by focusing on the actual benefits that 3D printing

2013 SmarTech Markets Publishing

can bring to the table, it will be possible to build 3D printing businesses that are viable and sustainable and that exhibit strong growth. The Four Production Drivers for 3D Printing Technology The deeper analysis of 3D printing contained in 3D Printing Markets: Hope, Hype and Strategies suggests that there are four genuine drivers for this technology; that is to say factors that can confer real economic benefits on those in the 3D printing segment. These benefits are (1) reducing wastage of raw materials, (2) reducing or elimination of shipping costs, (3) reduction in labor costs and (4) reduction in capital expenditures. At one level, these factors are in need of no further explanation, they are much of what any production manager would put on a wish list. But the situation is complicated by the fact that for each of the four key drivers for 3D printing technology, there are significant limitations. In the view of SmarTech, removing these limitations represents one of the key opportunities for business in the 3D printing business. We show this in more depth in Exhibit III. Exhibit III: 3D Printing Benefits, Challenges and Opportunities

Benefit Reduction of materials wastage

Advantages Reduces effective materials costs and costs of materials reclamation and disposal

Challenges 3D printing operates with a limited number of materials at the present time 3D printing is still quite slow, so may prove a bottleneck. Local skills may not be available Printers often turn out to be more difficult to use than outsiders expect

Opportunities Inks from new materials expand markets and reduce costs Faster 3D printing

Reducing or eliminating shipping costs

The ability to send the specifications of an object to be manufactured locally saves on shipping and other costs Supposedly, there is a reduction in labor costs because printers are easy to use compared with other types of production machinery in The 3D printer may contain everything necessary for the product to be manufactured.

Reduction of labor costs

Better training and easier-to-use printers. Important to set expectations properly Faster printers with broader materials palettes

Reduction capital costs

The 3D printer may not be suitable for all kinds of products, because of materials or speed limitations

Source: SmarTech Markets Publishing

2013 SmarTech Markets Publishing

The Long Run: Expanding Markets for 3D For the next few years, SmarTech believes that the opportunities that will exist in the 3D printing space will be primarily of the kind listed in Exhibit III. These opportunities are mostly matters of practical engineering. They are cost savings strategies that seldom involve much risk, but dont offer all that much return. However, we also believe that the best days of 3D manufacturing are yet to come. One does not have to fall for tall tales about manufacturing revolutions, and lost TV remotes being printed in the kitchen to buy into 3D printing having a glorious future. But we dont think that such a future will occur until 2018 or beyond. There are a number of ways that SmarTech believes that market expansion for 3D printing will occur and these are set out in Exhibit IV. Exhibit IV: 3D Printing Long-Term Market Expansion Possibilities Sector Opportunity Challenges Education 3D printers for training in universities and especially technical/community colleges. Also potential use in art classes, etc., at high school level and even below While we think there is too much fuss being currently made about the Maker movement, there is a long potential as skill sets firm up and printers get better Printing of medical materials is an area of intense R&D Extending the market by creating highly customized clothes, furniture, etc. Extending large firms reach to those who might otherwise have bought from a craftsperson Cost of printers. Experienced teachers and appropriate software Printers that are both low-cost and durable and fast enough to do something useful with Printing novel materials. Clinical trials Printing novel materials. Perhaps speed of printer

Market Requirements Broad acceptance and knowledge of 3D printing in the educational community Some established applications categories that makers and software companies can evolve around Acceptance by medical specialists Proven large-scale markets for mass customization

Home and Makers

Medical Mass Customization

Source: SmarTech Markets Publishing Dangling above all this, though, is one other possibility and we explore this in more depth in 3D Printing Markets: Hope, Hype and Strategies. This possibility would be a transformation of consumer markets in which it becomes possible to radically customize products ranging from clothes to consumer electronics. Some marketers believe that there is a pent-up demand for such customization; many people want clothing, furniture, jewelry, cell phones and so on that distinctly reflect their personality and tastes. But few people can currently afford such things. Perhaps ten years from nowor maybe a little sooner3D printing will be the technology that can plug the gap between the consumer desire to customize and the current cost of such customization. That would be truly disruptive.

2013 SmarTech Markets Publishing

This report is available for purchase via the NanoMarkets website at www.nanomarkets.net or by sending in the attached order form to our offices via scan and email at sales@nanomarkets.net or via fax at 804-360-7259.

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