Prosumer 3D Printers: The Dangers They Pose for the Personal Printer Market

Prosumer 3D printers are creating  a stir. These are the printers — priced from $1,800 – $3,000 — which offer larger build volumes, finer details, and increased print speeds compared to the lower-priced consumer personal 3D printers ($400-$1,200).  As is inherent in the name, “prosumer,” the printers can serve the market for serious hobbyists and design firms alike.

In SmarTech’s opinion, prosumer printers are really the first low-cost 3D printers that can create a part for a home project, or print a model consistently enough to make it worth while for the home consumer.

But where does this leave the lower-cost consumer printers?  The fact that a new 3D printer class has to be created to deliver on the promises originally made by personal 3D printers looks like an admission that current personal 3D printers don’t really get it done.

The truth is that many of current personal 3D printers are little more than toys: real-world applications are limited, even for the most creative hobbyist.  And that’s a problem that the invention of a prosumer class of printer seems to highlight.

SmarTech believes that the limitations of current personal 3D printers could potential evoke blowback from consumers outside the maker community. Many consumers are generally unaware of the time and effort it takes to create some of the colorful objects so proudly displayed on 3D printer manufacturer’s websites.  Or the skillsets that creating these objects require.

A customer that buys a 3D printer and has a negative experience will be less likely to invest in the next generations of personal 3D printers.   And the existence of the prosumer sector – for all its commercial importance – cannot help but show up the inadequacies of the lower end printers.

PLA: False Prophet of 3D Printing’s Green Future?

In recently published SmarTech industry analysis report on 3D printing materials, we forecast that PLA would find increasing use in both the personal 3D printing and educational 3D printing sectors. Total revenue generation by this plastic is expected to reach $218 million by 2018, and go on to reach $730 million by 2022.

There are several reasons to like PLA as a 3D printing material: print quality parity with ABS is one, pleasant odor when printing is another. But the one thing that one always hears about PLA is that its biodegradability matters and will make PLA a preferred substitute for ABS.

Now PLA’s green properties may well make a difference in the eyes of consumers, but does it actually make a difference to the environment?

PLA is deemed “bio-degradable,” but that designation comes with a caveat. PLA is biodegradable only in specialized recycling facilities. The truth is that this stuff won’t dissolve in landfills or homemade compost pits, just like other plastics won’t. PLA has also been known to foil other recycling efforts by contaminating recycling batches of other plastics.

The other big question hanging over PLA – as it does over other biomaterials – is if the real opportunity cost of producing PLA – isn’t too great. PLA is made mostly from corn (in the US) and sugar cane (just about anywhere else). But could these same agricultural resources be deployed better? Say, for feeding people?

The reality is that green properties of PLA are mostly superficial. If more suitable plastic with better green properties were to appear in the 3D printing market, PLA’s future market may significantly diminish. In fact, given the realities of PLA, it is hard to imagine that PLA’s green image won’t take a hit in the future.

Do Not Ask What Apple Could Do For the Personal 3D Printer Sector . . .

There is today an emergent Apple prophecy industry. It’s self-appointed task is to tell us what Apple will do next. Sometimes, it’s right (smart watches); most times, it’s pure conjecture (OLED’s in smartphones). Apple has almost $150 billion it could invest right now and it seems to be burning a hole in the collective pockets of the Apple prophets, although perhaps not in the pockets of Apple itself.

3D printing is among the cool new technologies that some believe are in Apple’s future. There is little doubt that Apple could own 3D printing if it wanted and turn it into whatever it wanted. Not just personal 3D printing: all of it. Measure Apple’s $150 billion against the market caps of 3D Systems ($5.6 billion) and Stratasys ($4.5 billion) and you’ll get the point.

So the interesting question is really not what Apple could do for the 3D printing industry – that much is obvious – but rather what 3D printing could do for Apple? Does Apple have any reason to move into a market whose financial rewards could be a drop in the bucket to their current revenues?

Apple may be seeking out the next iPhone or iPad, but such opportunities – true discontinuous innovation– aren’t easy to find. Not even for Apple. And for every iPad, there are plenty of Newton’s. Just because Apple is a successful firm doesn’t mean that every opportunity it pursues has to be worth billions now.

And, as it happens, personal 3D printing is worth billions. SmarTech forecasts that combined, personal 3D printing will clock up about $2.1 billion in sales by 2018. That includes equipment, services, software and materials. This sort of number does not seem to us to be too small for Apple to take them seriously.

There also appears to be a strategic fit between what Apple does well and the “essence” of 3D printing. We have three things in mind here: branding, retail and design.

Apple’s perfection in branding: Apple’s genius seems to be in perfecting existing technologies, adding value, and capturing market share through some of the world’s best brand management.

In the personal 3D printer market, Apple would find little opposition in this regard and could probably out compete everyone. Apple might be attracted to personal 3D printing by the ease in which it differentiates itself in a growing market.

More grist to Apple’s retail mill: 3D personal printer stores are now all the rage in the “Maker” community. Adding 3D printers to the products sold at Apple Stores is a way for Apple to capture revenues through leveraging the 3D printing meme in stores that have already proved their ability to squeeze every possible dollar of profit out each square meter of shelving.

Its no so much that Apple needs to add another product to its stores. But 3D printers are an image fit with the products that are currently in Apple Stores. Apple Stores are always packed with the kind of computer buyer who, if personal 3D printers are presented in the right way, might well become 3D printer buyers too.

Apple returns to its design roots: As SmarTech has pointed out before, 3D printing is more like desktop publishing than it is like word processing. That is to say, while just about everyone can use Word, it takes real design skills to do desktop publishing. Much the same can be said about 3D printing.

People don’t talk that much about desktop publishing any more, but it is still extensively used and generates large revenues. And during one of Apple’s earlier growth spurts, it was Apple’s preeminence in desktop publishing that drove it forward.

PCs never did all that well in the desktop publishing market for two closely related reasons. First, PCs were never all that design- or graphics oriented. Secondly, Apple worked hard to attract the design community, and it was quite successful in this strategy.

Apple’s legacy lives on in this regard. Apple’s desktop machines are still the favorites of the design community and SmarTech expects that a significant share of this community is going to have 3D printers in the next few years. Again this is a brand thing again; Apple can play this market from strength, bringing a name that designers have trusted for decades now.

An Apple-branded 3D printer could actually expand the personal 3D printing market. We stick with our forecasts, for the time being. But an Apple entry into the personal 3D printing could lead us to dramatically push our figures upwards as Apple presents the business case for 3D printing to its loyal followers

Voxeljet’s IPO: A Cautious Move in the Service Sector?

On September 17th, Voxeljet announced that it is trying to raise up to $100 million in an IPO.  Voxeljet had previously filed with the NYSE confidentially on August 12 under the symbol VJET.

Currently Voxeljet claims to offer one of Europe’s largest 3D printing service centers in its 16,000 square foot German facility and it seems likely that if the company has a successful IPO much of its new money will go into its service business.

In its filings, Voxeljet says it will both expand its European service center, as well as open service centers in both North America and Asia.

This strategy makes a lot of sense to us at SmarTech.  By 2018, we expect that services will be the biggest sector of the 3D printing market clocking up $2.8 billion in revenues.  So Voxeljet is tapping into 3D printing’s biggest revenue stream.

But we also see Voxeljet’s move as cautious:

Voxeljet must compete with ExOne, a significantly larger company.  ExOne already has six service centers around the world and has announced its intention to open nine more service more centers around the world by 2015.

With no end in sight to the poor European economy, it seems good policy for Voxeljet to diversify its customer base through expanding service centers to geographies where economic growth prospects are better than Europe.

Nothing wrong with being cautious in today’s world.  But we won’t know for sure whether Voxeljet is a winner or a loser for a few more years yet.

Form 1: The Next Big Thing in the Personal 3D Printer Market?

As the personal 3D printer market has seen an influx of new companies and printers in the last year, perhaps none is as intriguing as the Form 1 by Formlabs. Form 1 is, as far as we can tell, the first 3D printer to bring the stereolithography printing process into sub $4,000 dollar range. Form 1’s unique printing process makes gives a different look to what is possible in the realm of a “desktop 3D printer”, and could have serious implications in the industry.

Firstly to clarify, SmarTech defines personal 3D printers as the class of 3D printers that are priced in the under $3,000 range. Although recently introduced models are pushing the price point down to the sub $1,000 range, we tend to take these printers less seriously, as they seem more like toys than fully functional printers. Personal 3D printers are marketed to the “pro-sumer” class, a group comprised of individual professionals and enthusiast/hobbyists.

Currently available personal 3D printers are almost universally based on material extrusion technology, where plastic filament is fed through a heated printing head and applied to an object one cross-section at a time until object is built.

The Form 1 stereolithographic process instead cures a photopolymer resin to the build platform with use of a focused energy source. After a cross-section of resin is cured to the object, the build platform shifts away from the energy source, liquid resin is spread across the top layer of the object, and the laser goes to work curing the next layer to the object.

Because of the precise focus of the energy source and the properties of a liquid photopolymers, stereolithography is capable of prints whose accuracy exceeds other 3D personal printers, capable of printing features in 300 (.012 in) microns detail and layers of material as thin as 25 microns (.001 in) Examples on Formlabs website show models with precise detail, including an impressive plastic object with a thin kinked artery that channels blue liquid in the shape of the butterfly.

Until recently, 3D printing stereolithography machines have been reserved for use in the rapid prototyping sector, and have remained at a high enough price to put the technology out of reach of the individual user.

Form 1 looks to change this. In many ways, this shift of price mirrors both the development curve of earlier material extrusion machines and countless other technologies, where manufacturers push the price down in an attempt to get the technology into the hands of the consumer.

The Meaning of Form 1

When the book of how 3D personal printing evolved is written, it is unclear whether the Form 1 one will be a chapter heading or a footnote. When viewed in the context of the paragraph above, it would seem that the future of the personal 3D printing market would reside in personal 3D stereolithography printers.

• Form 1 appears to offer an unparalleled level of detail for printers in this price range. This should allow Form 1 to deliver on some of the promises that personal 3D printers have held but not delivered on for almost a decade, as well as open up the printers for new functions and purposes.

• But on the con side, the Form 1 lacks printer size and material selection. The maximum build size for the Form 1 is 4.9 x 4.9 x 6.5 in, where the build size for the comparably priced Cube X from 3D systems is nearly double in every dimension, with maximum build dimensions of 10.75 x 10.75 x 9.5.

• Where material extrusion 3D printers have a host of plastics and alternative materials being developed or already available, Form 1 looks as though a single acrylate resin will be available for the machine in the near future. Both these factors will limit the potential uses for the Form 1 printed objects.

Also, material extrusion technology seems to have picked up a critical mass in the personal 3D printers market. The number of players and level of investment in R&D will drive accelerated innovation in this sector, potentially nullifying the current print detail advantages of the Form 1 sooner rather than later. The high level of competition in the sector may also push prices down in personal 3D printers, making the Form 1 less competitive.

Thoughts

While it is hard to see stereolithography printers overtaking material extrusion printers as the 3D personal printer paradigm, SmarTech sees the Form 1 as a novel of enough product to gain sizeable market share, once it is released.

The detail it is capable of printing, may not only be enough to persuade new potential buyers to buy their product over competitors, but may also lure existing personal 3D printer owners who are looking for a printer capable of more detailed prints for their second printer.

If demand for the Form 1 is there, which we believe it is, then we expect Formlabs will work quickly to improve upon the shortcomings of the Form 1 we highlighted earlier. As a new company, Formlabs looks to have a lot of room for growth, and should become a more viable competitor in the industry quickly.

SmarTech would also not be surprised to see other companies announce plans to bring a personal 3D stereolithography machine to the market on the next 1-3 years. The Form 1 is due to hit the open market in December of this year. We will be watching eagerly to see how well the product is received by the market.

What Microsoft Really Means for 3D Printing: The SmarTech Perspective

The announcement that Windows 8.1 will support 3D printing has been greeted in the press with the usual fanfare deemed fit for any major Microsoft announcement. No doubt about it; Microsoft’s support of 3D printing is a big step towards credibility for personal 3D printing. One recalls what IBM did for personal computing.

But what does Microsoft intend with this announcement? One possibility: not that much! Microsoft casts a vote in favor of 3D printing, but adding an interface for an established OS; not such a biggie. It’s great promotion for personal 3D, but couldn’t have represented a huge investment for Microsoft. If 3D printing doesn’t take off, Microsoft simply utters a huge corporate “oh well.”

Conversely, Microsoft’s entry into personal 3D printing won’t immediately resolve the core problem for personal 3D printing: how to make a personal printer for under $1,000 that operates both at a reasonably fast speed and can produce products that are worth having.

So – apologies to Freud — what does Microsoft really want? A blogged comment from Shanen Boettcher, Microsoft’s startup business group general manager, offers a clue. “Making a 3D object on your PC will be as easy as writing a document in Word and sending it to print. Just as desktop publishing transformed how we write, we think desktop manufacturing will transform how we create,” says Mr. Boettcher (https://tinyurl.com/m586wjk).

The clue lies in the conflation of word processing (the reference to Word) and “desktop publishing.” At first, Mr. Boettcher seems to be saying the end game of personal 3D printing is the ubiquity of word processing. But then he says that 3D printing is more like desktop publishing.

This shift in focus is important; it reveals the split personality of the personal 3D printing industry right now. We want to believe in a future in which we are all “Makers.” It’s a cool idea and portends a huge new consumer industry. But the reality is that the skillsets and user-friendly software just aren’t there. Nor consumer interest? Few people grow their own tomatoes either. Fewer still, we suspect, will want to grow their own flatware!

More likely then that the valid business model for personal 3D printing will be more similar to desktop publishing. The user community for desktop publishing is made up of professionals: designers, multimedia developers, publishers, architects and so on. SmarTech believes that these are the kind of folks that will generate revenues for personal 3D printing too

Personal 3D printing is FrameMaker, not WordPerfect, as it were. No mass market in the sense that a Coca Cola would understand it. But a sizeable and addressable market nonetheless. And this is the market, we think that Microsoft is after for now.

Stratasys Buys MakerBot: The SmarTech Perspective

In the first Godfather movie, consigliore Tom Hagen advises the Don, with regard to the Corleone family entry into the drug business that “If we don’t get a piece of that action we risk everything we have. Not now, but ten years from now.”

In a more savory context, SmarTech believes that something similar can be said of Stratasys’ recent acquisition of MakerBot. Our recent analysis suggests that revenues from 3D printers sold to “makers,” hobbyists and home users will be under $10 million this year and will not exceed $100 million until 2018. This hardly seems to justify the roughly $604 million value that the deal placed on MakerBot.

However, we think that Stratasys, like Tom Hagen, was thinking in broader and longer-term perspectives.

1. MakerBot offers Stratasys a clear path to an important new market: It’s not just about Stratasys selling personal 3D printers but rather about it becoming a supplier of scanners, software, and services too. In our recent report, SmarTech forecast that in 2018 alone, sales of all hardware, software and services to the “personal” 3D printing sector will be worth about $340 million growing to a whopping $3.7 billion by 2022.

These numbers don’t include materials, but are based on a fairly conservative adoption rate by consumers of 3D printers. Thus we do not think that 3D printers have to be the next CD players for the Stratasys + MakerBot to make financial sense.

2. MakerBot has done an excellent job in building its business so far: If Stratasys was on the prowl for a consumer-oriented 3D printing acquisition, it could not have done much better than MakerBot.

MakerBot is now usually considered to be the leading brand in the personal 3D printer space. It has been able to build on the open source achievements of RepRap, while adding proprietary control innovations of its own. MakerBot has also made powerful friends in all the right places. Ford is offering to give MakerBot machines to any of its engineer that wants one.
Nokia offers its smartphone customers the ability to download files for MakerBot printers. And Autodesk is working with MakerBot to develop authoring tools.

MakerBot is on a mission of education and consciousness raising with regard to personal 3D printing and so far seems to have done a good job in this regard. Stratasys now gets to tap into this success.

3. Stratasys + MakerBot is a relatively low-risk deal: Of course things could still go badly wrong with the deal. 3D printing may turn out to be a flash in the pan. Or Stratasys may be simply ill equipped to absorb the MakerBot acquisition; clashes of corporate cultures are always a possibility.

However, as these things go, this is a relatively low risk deal. Because this is to be an all-stock transaction and, in any case, about a third of the money is being paid to MakerBot as an earn out, Stratasys remains unburdened by a cash drain. In addition, because Stratasys knows as much about 3D printing as anyone, the deal requires less of a discount for technology risk than an acquisition by a 3D printing outsider might have been required to make.

Given all of this – and in the words of “The Godfather” once again (but this time of the Don himself)– it is therefore understandable why Stratasys was able to make MakerBot a deal it couldn’t refuse.

Retail and Promotional Markets for Augmented Reality

Augmentation of reality using the mobile phone as a platform to enhance the promotion of a wide variety of products and services is already a practical reality. Indeed, this application for AR is drawing support from some of the most visible consumer brands including car firms (Nissan, Toyota, BMW, and Mini) and retail outlets (Lego and IKEA.) AR has also been used to promote movies (Transformers, Iron Man, Star Trek).

As SmarTech sees it, there are broadly three ways in which AR can be used to generate revenues in the retail sector. These are to (1) provide additional information to/opportunities for customers that will make them more likely to buy in a conventional shopping environment, (2) more visible advertising/media and (3) add functionality to Web shopping experiences.

The Business Case for AR in Retail: Providing Additional Information and Opportunities to Customers

More specifically what AR can do for retail and promotional applications is enrich consumer product selection and the actual experience of shopping. In both cases, the way that AR creates this enrichment is through some well-established strategies such as (1) making the shopping experience one that is broader than just shopping or (2) helps to turn advertising and catalogs into a more interesting customer experience.

The IBM shopping application: Perhaps the most prominent example of what can be done to provide additional information to and opportunities for customers can be found in IBM shopping application, which received considerable attention when it was announced in 2012. As far as SmarTech is aware this application/ system that IBM has developed is not yet commercialized. However, it is a good example of what might be considered an objective enhancement of the shopping experience.

The concept here is to provide customers with a lot more information than is usually associated with conventional “product scanner” apps that are based on barcodes. To achieve this goal, the camera in the mobile device is used to recognize different kinds of packaging using image processing techniques.

All the user has to do is to point his or her phone at the merchandise to get additional information. In this application, according to IBM, users also create their own profile based on personal preferences such as foods they are allergic to, for example.

Other information that the user can access to through this application includes product reviews, special promotions, dietary information, product specifications, price, applicable discounts as well as other information based on personal preferences. The application can also send an “alert” message to the user’s social networks, alerting friends where the user is doing his or her shopping.

IKEA’s 2013 catalog: IKEA’s catalog—of which more than 200 million are shipped—is enhanced with AR. Where AR is used in the catalog is indicated by a symbol that resembles a smartphone. The catalog user is equipped with a smartphone and the IKEA app and holds his or her phone over the catalog. This provides the user with additional description, photos or video of the product being viewed. There is also an “x-ray” feature, that lets users look inside a piece of furniture. In addition to IKEA, McCann, the advertising agency was involved in creating the digital layer for the new catalog.

Business objectives: The various ways in which this kind of AR enhancement is supposed to make or save money is perhaps clearer than in any other part of the AR-enhanced retail market. These include the following:

• Extended exposure of customers to catalog and promotions. IKEA expects to generate new revenues from its AR-enhanced catalog by extending the life of the catalog in consumers’ homes. The additional interactivity supplied by the AR feature, it is hoped, will extend the lifetime of the IKEA catalog for a few months and that this extra lifetime, will mean more sales for IKEA.

• Incentive to a quicker purchase. The business objective of the IBM application appears primarily to enhance customer loyalty. It is hoped that in stores that have this system in place, the customer will get enough additional information that they will make an instant purchase rather than feeling that they need to do more research, at which point they leave the store and ultimately buy the product from another source or online.

• Improved market research. The IBM application can also serve as a market research tool for retailers. Capturing the likes and dislikes of customers is said to permit more opportunities for targeted cross-selling and up-selling promotions, optimized floor plans, better product arrangements and even new types of point-of-purchase AR deployments.

The Business Case for AR in Advertising and Media: More Visible Advertising, but the “Wow Factor” Could Disappear Quickly

Using AR to enhance advertising and media is already fairly well established and some examples of how this is being done are provided below. There are many others. In addition, AR can be used to integrate print and video marketing. Printed marketing material can be designed with certain “trigger” images that, when scanned by an AR enabled device using image recognition, activate a video version of the promotional material.

As the Domino’s example below shows, it is also possible to combine AR-enhanced advertising with an actual shopping experience.

Bloomingdale’s/NBC: This campaign involved virtual avatars of characters from the latest NBC shows being placed in store. Shoppers pointed their mobile phone cameras at a certain in-store location and were then able to see—and have their photos taken with—the virtual “stars.”

Domino’s: In the U.K., Domino’s has used AR-enhanced billboards at 6,000 sites, to enable consumers to order a special pizza deal. While this is a rather simple hybrid application, we see a lot of potential here, primarily because digital signage, the market being addressed by AR, is a very rapidly growing area. Domino’s is working with Blippar in this application.

Nike/Finish Line: Using GoldRun’s technology virtual Nike Air Max shoes have been placed inside Finish Line stores for a promotional campaign that shoppers could only see by using the cameras on their mobile devices.

Orange: One novel project that is being conducted in Israel by Ogmento in conjunction with Orange Telecom Israel to promote that service provider’s iPhone launch. If a user points an iPhone at the Orange logo a virtual iPhone hovering over the logo will appear. Finger gestures can be used to turn the iPhone around, zoom in or out, and launch apps.

Philadelphia Eagles: The Philadelphia Eagles football team has worked with HP’s Aurasma product to create AR tickets. The Eagles’ management sees this as a PR effort that exploits the “wow’ factor inherent in AR. In this application season ticket holders hold their smartphones over these tickets and view AR apps that showcase “favorite players,” with additional game highlights, analysis, game previews, and messages to fans from Eagles players.

Playboy: Playboy has “selected Layar as its provider of choice for interactive print,” according to the company. In the deal with Playboy a “certified Layar partner,” Limebizz is also involved. Readers of the print version of the Dutch edition of Playboy can now scan special pages with the Layar App to receive extra content in the form of videos, image carousels, custom links and Layar’s newly introduced HTML widgets. The company has explicitly noted that the source of advantage of using Layar in this way is that adding AR the amount of content can be almost infinitely extended beyond the actual 114 pages of the print magazine.

Virtual Smurfs and other movie ads: Another GoldRun campaign was based on an AR app that placed a virtual Smurf inside iPhone photos as a means of supporting the latest Smurf movie. The app is claimed to extend the “movie experience into reality. Other movies that have been advertised with AR campaigns include “Iron Man,” and the 2009 “Star Trek” movie.

In general, SmarTech believes that the case for using AR in advertising and promotional activities is very strong. In fact, even a cursory review of what is going on today with regard to AR-based advertising shows that AR is already well established among major brands and as such may be seen as having a credibility in the advertising space that AR does not have in some other applications.

This perhaps should be no surprise, since novelty plays an important part of any successful advertising or promotional strategy. AR appears to provide such novelty to a considerable degree. Given this, we think that the near-term market for AR-based promotional and market support of the kind described here is huge. Catalog and advertising revenues, for example, run into the tens of billions of dollars.

For short-term revenue generation, therefore, the advertising sector may be a good place to be for AR firms. What we are more skeptical about is profitability, both short-term and long-term. In the short-term it seems highly likely to us that ad agencies, PR firms and perhaps even AR technology firms themselves will rush into this sector, taking on medium sized projects, and then finding that project cost mount considerably to the point of unprofitability. New technologies often cost more to implement than people initially expect.

Even once AR technology is mastered in the advertising/promotional industry sector, we think there will be some issues with AR-based promotion; in fact, it may be that once the technology is mature and people know how to deploy it, this may be exactly when the problems begin. There are few barriers to entry and AR could become ubiquitous. Once upon a time, Web sites were considered to be cool and drew positive attention to the firms that put them up. Now every company has to a have a Web site or it will not be taken seriously by anyone. We think it is possible that AR enhanced promotion could go the same way; that is that the “Wow” factor will ultimately be lost.

There is some evidence that this is already beginning to happen. QR codes are after all not novelties. However, it does seem that AR firms whose chosen target market is primarily advertising can still attract funding from venture capitalists and certainly from angel investors. But longer term, AR advertising and promotion is likely to be seen as necessary costs to maintain market share, rather than as innovations to build new business revenues and gain market share. Revenues will continue to increase, but the profitability of AR technology in this area will certainly come under pressure quite quickly

The Business Case for AR in Retail: Enhanced Web Shopping

With Web shopping and e-commerce being so ubiquitous, Web-based retailing is also looking for novelty and many of the comments on the role of AR in conventional retailing also apply to Web base retailing, including the likely long-term outlook. However, there are also higher levels of functionality that AR can bring to Web-based retailing.

One application that seems to be attracting serious attention is businesses built around the concept of trying on clothes, jewelry and so on. There are—in our opinion—some limitations on what can be achieved in this regard. This is because, although certain items can be “virtually tried on,” others—especially clothes that either cover the whole body or need to be seen in a complete body image—are poorly represented.

This contradicts the purpose of the virtual “try on” in the first place and we think that AR-based clothes shopping is likely to do best when small items such as spectacles or jewelry are involved. Suits and dresses, not so much.

SmarTech expects the quality of this kind of application to improve and if it can reach a quality of performance where people can broadly use “try on” services for a broad range of clothing, it could have some relatively important implications for clothing retailing. Because there are many other aspects of trying on clothing than just seeing the clothing worn on a person, we doubt that it is ever going to replace the real world trying on of clothes. But the concept can be extended to other revenue generating services such as making clothes and then trying them on, entirely in virtual mode.

Ditto: Ditto is a start-up firm that has developed an AR application that lets the customer “try on” glasses before buying them. The Ditto application (1) enables the customer to see him or herself in 180-degree views of a customer in glasses and (2) also allows users to post side-by-side snapshots in different glasses, and then post these pictures to Facebook for feedback from friends, spouses, etc. Ditto has recently (2012) been funded to the tune of $3 million.

TryLive: This is a virtual dressing room application that is intended for use by clothing companies. It is described as a new brand of Total Immersion, but also seems to have been developed in conjunction with Intel. In this application, the user puts himself or herself in front of a Web cam and the app then tries on the clothes using AR technology. A description of this app specifically mentions that TryLive is suitable for trying on glasses, shoes, watches, jewelry, and headphones.

Zugara: The Zugara “Webcam Social Shopper” platform generates an image of what an item looks like when worn using information from a web cam. The Zugara application also detects when a user waves a hand and automatically increase or decrease the size of the product. Users can also take pictures of their virtual ensembles and share them on their social networks. In addition, multiple users can simultaneously browse, chat, try-on and comment.

This information is extracted from SmarTech’s Opportunities for Augmented Reality: 2013-2022.

Three Sources of Cost Advantage in Additive Manufacturing and their Implications

The additive manufacturing “revolution” is driven by many factors.  Absent the “Maker” movement going viral, creating massively new addressable markets for 3D printing, most of the drivers for 3D printing are cost related.

SmarTech has identified three primary cost-related factors which will propel additive manufacturing forward.  We think that each has important consequences that will shape the additive manufacturing market.

Additive Manufacturing is Automation

Parts that previously required manual assembly can now be printed as single pieces. These savings look to become greater in the future, as printers gain the capabilities to print larger, more complex parts out of multiple materials.

We don’t expect this evolution to be rapid.  But what SmarTech does predict is that additive manufacturing will come to seem more and more part of the larger trend towards automating the skills of highly-skilled technicians and craftspeople. This does not yet seem to be part of the conventional wisdom surrounding additive manufacturing.

Lower Material costs: Does it Matter? 

At present this conventional wisdom seems more focused on touting additive manufacturing as a technology that will save materials costs.  But how much will this really matter?  Most of the materials that are used for 3D printing are not especially expensive.

Even though additive manufacturing may use one-tenth the material needed in more conventional manufacturing, we think this will prove only a small incentive to the deployment of additive manufacturing.

Equipment prices: Low and Lower

A much bigger incentive may come from the fact that additive manufacturing equipment – notably 3D printers – are relatively low cost when compared with other machine tools.  At the same time, many of the patents for the original additive manufacturing techniques have expired, inviting new entrants into the market and leading to further price declines.

Low price additive equipment will encourage its wider use.  The “Maker” movement – although we think its impact is currently exaggerated — is an example of this happening today.

Why Rapid Prototyping Got There First

Additive manufacturing, at any cost, is an enabling technology; necessary but not sufficient.  The businesses in which its use will be most profitable have yet to be determined and SmarTech believes that successfully identifying these opportunities will be key to success in the additive manufacturing market.

Just noting the ability of additive manufacturing to costs will not in itself make the opportunities evident to entrepreneurs and corporate planners.  But the analysis above does serve as an explanation of why rapid prototyping has emerged as the first “big” application for rapid prototyping.

The point here is that prototyping is an established activity that is characterized by slow processes and high cost labor.  Because of decreasing costs, what additive manufacturing now brings to the prototyping activity is (1) equipment that is comparable in cost to traditional prototyping equipment and with higher effective throughput and (2) the opportunity to reduce the labor costs associated with prototyping.

There are also enough prototypes that are within the scope of today’s additive manufacturing to create a sizeable market.  While we hesitate to use the word “disruptive,” additive printing, does seem to have the whiff of disruption about it.

There is certainly a pent up demand for faster prototyping in many industries and the potential cost advantages that additive manufacturing brings to the prototyping table are already being felt in selected industries and SmarTech expects to see them spread to other sectors in the next two to three years.