Should The Established 3D Printing Giants Worry About Hewlett Packard’s Entrance into the Industry?
There has been a tremendous amount of speculation as to just what Hewlett Packard has been up to these last few months. They clearly are going to be making an entrance into the 3D printing space sometime before the end of this year, but no one besides HP CEO Meg Whitman, and a small number of HP engineers and executives know exactly what the company plans to do within the industry.
The speculation has been partially responsible for the collapse in the prices of several key 3D printing stocks. 3D Systems is trading at approximately a 50% discount from its highs, and Stratasys shares are off about 35% from where they were trading just a few short months ago. The big boys within the industry are clearly a bit worried. Earlier this month 3D System’s CEO Avi Reichental expressed his worries about a possible entrance of HP into the 3D printing space, in a statement he made to FOX Business Network’s Liz Claman,
“I have been worried for quite some time, which is why we have launched more than 24 new products in the last three months, which is why we acquired the Xerox Wilsonville R&D team to begin to catapult our capabilities forward. And in the meantime HP keeps moving the date further out.”
Hewlett Packard isn’t a company to fool around with. After all, their market capitalization is 12 times that of the largest 3D printing company in the world, 3D Systems. While 3D Systems currently is worth just over $5 billion, the market cap of Hewlett Packard is a staggering $60 billion. In fact, Hewlett Packard has enough cash on their balance sheet to purchase the top five 3D printing companies on the planet, and still have some left over. Hewlett Packard is looking for a catalyst. After all they have seen their top and bottom lines stagnate in the last few years. 3D printing may be a market which could bring growth back to the company.
Should investors of Stratasys, 3D Systems and other various publicly traded 3D printer manufacturers panic? Probably not. Although HP has the deep pockets needed in order to enter a space and dominate it, such maneuvers where a large company jumps into a somewhat established market to capture a huge chunk of it, within a short period of time, do not have a great history of paying off. Apple would be the one major exception when they unveiled their iPhone in 2007. Whatever HP does do, it will likely take a couple of years to really develop. With investors anxiously waiting for growth of the bottom line, the abnormally expenses high expenses that the company may have in their drive to capture market share, could quickly turn their board of directors against the management within. The established players in the industry already have the distribution channels, the patents, and the know-how to grow, as well as fend off competition. Remember, those working for 3D Systems and Stratasys are all experts in this field, capable of adapting to changes within the industry, and moving forward with their plans regardless of what other mega corporations do.
In the end, HP will likely capture a certain segment of the market, whether it’s the service side of 3D printing, the consumer side, or the manufacturing side. This will leave plenty of room for the established players within the industry to continue to grow and thrive. Let’s hear your opinion of HP’s entrance into the 3D printing space at the forum post located at 3D Print Board.
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