(Photo credit: fdecomite)
3D Systems has just announced its intention to leave the consumer market for 3D printing. The company officials argue that this will only have a 2% impact on revenues and it will improve profits in the medium term.
Several analysts have expressed doubts about this course of action. They argue that this is the end of the rationale behind sky-high valuations supported on the explosion of the consumer market.
I believe this reasoning is wrong. I’ve stated in a previous article that:
The company that is able to profitably explore two or three market segments will be the one to get the funds to fuel R&D to keep developing the process and eventually spill over the tech to other market segments. (…) 3D Systems has not been able to avoid the seduction of addressing the mass market. I believe it’s too early to try to focus on the mass market of individual consumers.
Basically, if the present shift in focus means that the company will start focusing on 2 or 3 profitable market segments, then I believe this is a very good sign for the long term of the company.