by Noah D'Mello

It’s 2016, let’s leave behind the year that saw the fall of 3D printing giants

Jan 27, 2016
BudgetingBusinessComputers and Peripherals

2015 was not particularly the best year for 3D printing companies. But a few numbers and analysts suggest that this should not define 3D printing’s run in 2016.

The 3D printing market is synonymous with companies like Stratasys and 3D Systems, but in 2015 these companies were not in the pink of revenue health. The biggest players in the market, Stratasys and 3D Systems, both reported declining revenue. Stratasys announced a $938 million loss in their third quarter. Its subsidiary, MakerBot, already has had two rounds of layoffs since April 2015.

In an interview with Fortune, Jonathan Jaglom, CEO of MakerBot, said they went ahead with the layoffs because the 3D printing market wasn’t necessarily meeting the company expectations.

“That has to do with the dynamics of the market and the fact that we’re not hitting our numbers. Not hitting our numbers equates to financial difficulties and burdens,” Jaglom said.

Meanwhile, the stocks of 3D Systems dropped by 7 percent after CEO Avi Reichental parted ways with the company.

“While we are continuing investments in new products … we are taking decisive steps to further reduce our cost structure and better prioritize our resources around near-term opportunities,” said David Styka, chief financial and accounting officer at 3D Systems, during the revenue release. “These measures include additional facility consolidations and headcount reductions.”

Interestingly, Goldman Sachs recently told investors that potential customers are slowing their buying of 3D printing technology. They said this was “likely industry-wide more than company specific.”

In addition to this, these companies which are already showing signs of slowly fading away are facing stiff competition from new players in the market, especially HP Inc, which is expected to start shipping its own line of 3D printers next year.

But some numbers speak a different story. Gartner forecasts that worldwide shipments of 3D printers will increase 129 percent from 106,761 to 244,533 from 2014 to 2015. In the same period, the revenue will increase 54 percent from $944 million to $1.451 billion.

In terms of shipments, 3D printer unit shipments will grow at a CAGR of 121.3 percent through 2019. For the same period, corresponding annual average spending will grow at 72.8 percent. Sales will exceed $14.6 billion in 2019 as consumers, educational institutions and businesses ramp up their purchases.

3D printer unit shipments will grow at a CAGR of 121.3 percent through 2019.

Context, a market research company, said that over half a million 3D printers have been shipped globally between the 1980s and mid-2015, with the millionth unit on track to ship by 2017.

Pete Basiliere, research vice president at Gartner, also shares this opinion. “We should not confuse the stock performance of the few publicly held companies with the market opportunity. 3D printing is definitely not on the decline,” he said.