Market Size: How large is the market for consumer 3D Printers?

Introduction: 286% Growth, but did you even know?

Consumer-oriented 3D printers (printers priced at less than $5,000) have been averaging 286% growth between 2007 and 2012, but unless you were at Wohlers Associates you probably didn’t know exactly how quickly this market is growing. 3D printers targeting hobbyists, schools, and everyday consumers is a booming market that began seven years ago, but with manufactures keeping their lips tight, only industry insiders understand the true value behind this market.

For outsiders there are two approaches to estimating the size of the market. One way is to purchase Wohlers Associates‘ annual report on additive manufacturing (3D printing) which is by far the most comprehensive report available. However, unless you are able to fork out $495 for the report, then until recently you were on your own to figure out the size of this market.

The second method which I have attempted involves aggregating all the information freely available online into one report that will reveal three questions people have been longing to know:

  1. How many printers have been sold thus far?
  2. How many printers can we expect to sell into the near future?
  3. What is the current market share breakdown?

This report will string together a trail of information made freely available by Wohlers Associates, 3D manufactures, and bloggers writing about the market. Alone these pieces of information only give you a single snapshot in time, but strung together we can get a larger picture of the market and where it is going. It is important to note both historical and forecast numbers are estimates I have calculated as no official industry  numbers are available online hence the reason behind constructing this report. With that in mind, let’s get started.

 Historical Estimate: How many 3D Printers have been sold?

The great thing about expensive reports like the ones released by Wohlers Associates is that with every report they make PR releases, blog posts, and interviews that describe the findings within their report. These releases often only scratch the surface of the report, but piecing those snip-its over several years can create a meaningful picture. Below are the findings summarized in two graphs.

Figure 1
Units Sold Each Year

Figure 2
Cumulative Units Sold

As you can see from the two graphs above, consumer-oriented 3D printers have been exploding in growth. What started out as a tiny market with less than 1,000 printers has now exploded with an accumulated market size of around 68,000 as of 2012.  Now I know it’s 2014, not 2012, and therefore we should be adding 2013 to the historical estimate. Wohlers Associates just released their 2014 annual report and have not yet spilled the beans online on how many consumer printers were sold last year. Once that information is released, the charts above will be updated to reflect that. Until then, we can figure out the market size in 2013 through a simple forecasting exercise.

Forecasting Estimate: How many printers can we expect to sell into the near future?

As figure 1 shows, there were concerns that the market may be slowing down with only 46% growth in 2012, but those concerns are only partially correct. Achieving +300% growth for any market is a tremendous feat, but those growth rates are only feasible when you are a small emerging market. After receiving a few years of mainstream coverage, those growth rates are starting to slow down. While we may not see triple digit growth rates again (not impossible, just less likely), 2013 likely saw higher growth than 2012. Stratasys recently released their Q1 2014 financial results and within this report they reveal that Makerbot increased its revenue 76% over last year’s Q1 results. This is a sign that the market is still performing well and that growth rates were likely above 46% in 2013.

Now I am no fortune teller so when it comes to projecting results into the future I like to create a spread that shows multiple possibilities rather than one number. As a result, I have created a low, medium, and high scenario that sizes the consumer 3D printing market from 2013 to 2018. Again, humans are quite poor when it comes to predicting the future, hence why simplicity is always better in these scenarios. For that reason  each scenario has a constant rate the market will grow at from 2013 to 2018. In reality, this growth rate will fluctuate and I would not be surprised if the actual market started in the medium scenario, went into the high scenario and then came back down. However, for simplicity sake we will use constant growth rates to make it easier to understand.

Figure 3
Forecasting 3D Printing Unit Sales per Year

Since consumer 3D printing made up only 2% of the entire 3D printing industry in 2011 ($26.1M over $1.71B), it’s fair to say that growth rates within this new emerging segment of the industry will likely be higher than the industry average. The industry has been averaging 27% growth over the past 26 years and the low scenario is one in which growth rates decline to the industry average. A medium case scenario has been set at our last recorded growth rate of 46%, while a high growth rate is set to be double that at 96%. Such a large spread between scenarios needs to be accounted for as growth rates have been widely swinging over the last five years. If we take the historical estimates from Figure 1, and calculate the growth rates from 2013 to 2018 we get figure 3. For exact numbers see the tables below.

table

A lot of people have been wondering when we will see one million consumer 3D printers out in the market. Based on these estimates, if the actual market grows between the medium and high scenario, we are likely to see one million printers sold between 2016 and 2018. If the market is closer to the low end of the scenario then we are likely to see one million in cumulative unit sales by 2020. This gives us a two to six year spread. Once we hit this mark we are likely to see more complimentary products and services pop up as the larger user base will attract more funding into the market.  Again, I’m not here to tell you what the future is going to be, but these graphs and charts aim to give you an idea of the size of the opportunities ahead.

Market Share: Who are the largest players in the game?

To test the accuracy of the 2013 forecast I calculated using historical data from Wohlers Associates, I created a second approach by researching cumulative unit sales of each player in the market. Since the market is fairly concentrated, by adding up the largest players we should get close to 120,000 in cumulative unit sales in a medium scenario.

ByCompany

We can see from the findings above that the total of 98,000 units is not too far off from our estimates of 120,000 in a medium scenario. There are other players in the market not included in this list due to the availability of information. If we were to add those players in we would likely come very close to our estimate of 120,000 in cumulative unit sales.

If we agree then that the forecast estimates are fairly representative, we can combine the two sets of data together to understand the market share of each competitor as shown in figure 4 below.

Figure 4

marketshare breakdown
 *As of 2013

As we see from the breakdown the industry is fairly consolidated around three main players: Makerbot (34%), 3D Systems (16%), and Flashforge (16%). The remaining  34% is taken up by other prominent manufacturers like Solidoodle and Ultimaker and an “other” category that contains companies like Printrbot, MakeGear, XYZprinting, and a more fragmented base of smaller players. As the market grows it will be interesting to see how the market share develops over time. Will Stratasys and 3D systems continue to acquire existing players that challenge their dominant market share, or will Flashforge climb to #1 using its strong presence within China? Either way I hope the numbers, charts, and tables above help you, the reader gain a better understanding of the bigger picture and the direction that this market is headed.

Sources

About Amir Bashir

TMT Strategy Consultant, Canadian, Value Investor, TV Junkie, and Traveler me@amirsthoughts.com

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