If you don’t know about 3D printing, you need to.
Just a few years ago – before most folks even knew what it was – Michael Robinson said the 3D printing market was experiencing scorching growth, and said it would very quickly turn into a trillion-dollar business.
But here’s the best part: Because of new technologies – not to mention all sorts of new uses that seem to be increasing by the day – Michael says that investors who move right now can get in on the “ground floor” of that trillion-dollar opportunity.
To talk about the profit opportunity that 3D printing poses, and to give you a rundown on some of the players, Michael sat down for a conversation this week with Money Map Press Executive Editor William Patalon. Here’s a transcript of their talk.
Take the time to peruse it: As Michael says, openings like this come along maybe one or two times in every investor’s lifetime …
Patalon (Q): Michael, we saw this week that auction site heavyweight eBay Inc. (Nasdaq: EBAY) announced several initiatives involving the hot 3D printing market. Just what is 3D printing? Some analysts continue to say it’s a novelty … but you identified it very early on as a major investment opportunity. Just what are the growth prospects? What kind of upside are we looking at here … from a sector or business standpoint?
Michael (A): Bill, this field is anything but a novelty. Not long ago, one of the players in this space was able to 3D “print” human heart tissue and to get that artificial “organ” to beat like a real heart. That company is still in its earliest stages, but is now coming on strong and attracting a lot of investor interest.
The success of Organovo Holdings Inc. (NYSE: ONVO) is significant for a couple of reasons.
First, Organovo was formerly traded over the counter and just switched to the “Big Board” only days ago. The stock is up some 208% over the past year.
Second, biotech can greatly benefit from 3D printing. The technology can be used to print medical devices as well as implants like replacement knees and shoulders. A woman in Europe recently had her jaw replaced with an artificial one doctors “printed” using titanium powder.
Let me just add that the eBay announcement is further proof the 3D industry is about to go mainstream. It comes after big box retailer Staples Inc. (NasdaqGS: SPLS) said in May that it will soon begin selling an entry-level printer made by industry leader 3D Systems Corp. (NYSE: DDD). We’re just at the tipping point where this technology breaks big and has a huge impact throughout the global economic supply chain.
Patalon (Q): What’s the technology behind 3D printing? Is it fully developed – you know, “market ready?” Or is there still a ways to go?
Michael (A): I’ll explain just how it works in a moment, but first let me emphasize – and this is important to understand – that this technology is fully developed. In fact, we are now in the early phases of what I would consider to be “advanced uses.” For instance, aircraft manufacturers want to go from prototypes and making some parts to printing huge sections of wings and other critical components.
Now then, technically speaking, 3D “printing” doesn’t work like an ink-jet printer that shoots ink onto a page to form letters, words, sentences and images like pictures or charts. Instead, a 3D printer lays down successive layers of materials composed of special powders – like plastics and metals – and a binding agent.
Patalon (Q): I have to say – and I’m taking off my “serious journalist” hat here – that sounds very cool … very “the future is now.”
Michael (A): (Laughing) You know, you’re right. It is very cool. And it’s not just because of what it can make. It’s the fact that you can actually achieve productive objectives with this … as you said … very cool technology.
The printer simply follows a 3D blueprint or diagram. For that reason, the uses of 3D printing are nearly endless – and I truly mean endless. We’re talking, here, about finished products that span everything from custom-made guitars … to auto parts … to medical devices and implants … to novelty items. And that same technology can be used to make what is known as “rapid prototypes” of thousands of products, greatly saving money for a wide range of consumer product firms and manufacturers.
In terms of equipment, you can buy an entry-level, consumer-grade device for as little as $1,299. But manufacturers can buy huge, state-of-the-art machines that can run well over $100,000.
Patalon (Q): I know that you’ve said to me that this is like investing in a brand-new industry … that this is the chance to get in on the ground floor of something very special.
Michael (A): That’s just it, Bill. Even though the industry has been around for 20 years or so and is fully mature in some ways, the fact that we’re just now finding all these new potential uses … and that’s what has energized 3D printing and turned it into what is essentially an entirely “new” business.
It’s that rare situation where you have an established industry that’s still on the cutting edge that has been supercharged by new technologies and new uses.
Patalon (Q): All those new uses … and new technologies … including those created by things like new “home” printer … which has effectively created a new consumer market?
Michael (A): Yes, yes … exactly. That’s exactly right. I’m talking about those new uses for 3D technology.
If you can’t tell (laughing), I’m really jazzed about this. I’m a lover and user of technology myself, so I get excited when I see something like this taking hold. And you’re a gadget guy yourself, Bill, so I know you understand what I’m saying.
And this is doubly exciting for me … as the editor of both the Strategic Technology Investor and Radical Technology Profits services … I see big – and I mean BIG – profit opportunities for my people.
All of this … all of this together … is what makes this so exciting and potentially profitable for savvy investors who know how to play this sector.
Bill … the bottom line here … and I can’t underscore this enough … is that this kind of thing doesn’t happen that often – but when it does you need to jump on it.
Patalon (Q): Who are the big users – on the industrial side? Is there a mass commercial market here? And tell us more about the consumer-market potential, since that’s part of what seems to have brought this technology into the mainstream.
Michael (A): The list of users would run several pages at least. Organizations like Fender, the musical equipment firm, Bell + Howell, Adidas, NASA (Mars Rover), Logitech, BMW, Jaguar Land Rover, and Xerox. Trust me on this: I’m barely scratching the surface of known users.
Having said that, there is a mass commercial market out there on the industrial side. That’s pretty much a given as 3D printing increases its penetration on an almost-weekly basis in just about every industry you can think of.
On the consumer side, no one really seems to know just how big that market is now and how far it will go. But the thing to keep in mind here is that there is a massive potential market of several million users on a global basis who are part of what’s called the “maker movement.”
Patalon (Q): That’s intriguing … what’s that?
Michael (A): These are folks who like building things on their own … you know, the hobbyists in many fields and creative types like designers and architects. Just think what it would be like to conceive – on your own – an idea for a radical new bicycle design … and then being able to “print” most of the parts yourself. And then sell it within weeks. It’s heady stuff.
Patalon (Q): It sure seems to be. So let’s try to flesh this out for the readers … and quantify, if we can a bit, what this really means. In terms of sector growth, what is the upside in terms of dollars, revenue, and similar metrics? How long will it take to achieve true critical mass? What are the catalysts here … you know, the global business drivers that can transform this picture that you’re sketching out into a true reality?
Michael (A): The basic number I’ve seen tossed around and have used myself is a total market value of roughly $1 trillion.
Patalon (Q): Wait, Michael … I’ve talked to you a lot about this over the past year or so … so I’ve heard your estimate before. But I want to make sure the folks who are reading this understand what you just said. You said “trillion” … trillion with a “t.” So we’re talking about a business with some real heft here. I mean … we’ve become so used to big numbers that they sometimes don’t make the impact that they should. At a trillion dollars, we’re talking about a market that’s roughly on par with … perhaps just a bit smaller than … the entire economy of the country of South Korea.
Michael (A): Yes. This is a big, big potential market. When I said that I get excited for my readers and subscribers, this is why. There’s the potential to make some serious money here.
Let’s break that down. It includes the dollar value of the printers, and supplies as well as the economic impact of getting this technology throughout the economic supply chain.
The actual industry’s sales will, of course, be much smaller. The market research firm Global Industry Analysts (GIA) estimates total sector sales of $3 billion by 2018, about a 3-fold increase from 2012. Forbes estimates sales of $5.2 billion by 2020.
Patalon (Q): And I saw where Lux Research just said $8.4 billion in 2025.
Michael (A): There you go … follow that trajectory and you see that this is, as you said, a business with some “heft.”
Within a decade, for instance, remote outposts like oil rigs and ships will be able to print replacement parts on the fly. Two months ago, a U.S. Navy expert wrote a commentary saying that 3D printing could transform the way Marines and sailors build and repair aircraft, design shelters, produce food, treat injuries – perhaps even printing their own ammo and drones.
Just the military ramifications alone could be worth several billion dollars a year. That same thing will happen in shipbuilding, car and aircraft manufacturing, plumbing and lighting fixtures, electrical components and more.
Patalon (Q): And it’s not just the size of the business – it’s the rate of growth … correct? I mean, high rates of growth are what translate into high rates of growth in share prices, and high Price/Earnings (P/E) multiples for the shares themselves.
Michael (A): When I say that “the road to wealth is paved by tech,” that’s why. High growth rates translate into high investment returns – especially when they are compounded over extended periods of time. I talk about turning $25,000 into $250,000 … over reasonable periods of time … well, you can’t do that investing in businesses that are growing at a few percentage points a year. But you can do it investing in good companies that are in high-growth businesses. I talk about focusing on stocks that can double your money … you can do that with some of the “special situations” that I’ve told my readers about. But they only come along once in a while. So you’re mostly looking to do that by investing in industries with high rates of growth. And by picking truly good companies in those industries.
Patalon (Q): What can we derive from the eBay announcement? What does this tell us?
Michael (A): The eBay news shows how global the industry has become. eBay says it will sell items printed on machines from companies based in Canada, France and the U.S. And the industry is going mobile – eBay users buy the products after downloading an app to their iPhones.
Right now, the app is currently limited to items like jewelry, iPhone cases and metal rings whose costs are limited to about $350. From that standpoint, the firm appears to be starting with low-cost novelty items – you know, items for an online “flea market.”
Patalon (Q): But it’s a start.
Michael (A): Exactly. This shows just how quickly the technology is going mainstream and is good for public awareness. There will be more … lots more, in fact. Ultimately, I think eBay will find itself getting involved in more robust products as the industry continues to grow.
Patalon (Q): What should we watch in order to see this develop? What indicators or developments should we be following?
Michael (A): Right now, I’m looking to see both of the industry’s bookends expand at once. By that, I mean, I want solid industry growth and profits and additional cutting-edge applications.
I believe the industry needs to show it still has strong fundamentals following the recent round of M&A activity. So, I’d like to see solid growth in sales and profits this year and next.
At the lab level, NASA is looking at ways to 3D print food for deep space missions. And a Harvard research team recently demonstrated the technology can be used to print batteries the size of grains of sand, which could power a wide range of miniaturized electronics.
So, I’m looking for continued proof that investors can make money today while scientists use 3D printing technology to have a major impact on the world of the near future.
Patalon (Q): And I’m sure you’ll keep your subscribers informed about any new developments and new opportunities that you see – as you see them …
Michael (A): You can count on that. We talk about a lot of things here at STI … my five rules for tech-investing wealth … the objective of finding double-your-money stocks … and most important of all the goal of helping my readers avoid the fate of so many “no-net-worth” Americans. These are all important concepts. They’re the foundation for everything what we do here.
Patalon (Q): Thanks, Michael.
[Editor’s Note: Your feedback is very important. As always, I welcome your comments, questions, suggestions, and opinions. Post a comment below … I look forward to hearing from you.]