HP Inc. vs. Carbon: How Do These Compelling New 3D Printing Entrants Stack Up?

By Markets Fool.com

Diversified 3D printing industry leaders3D SystemsCorporation and StratasysLtd. will face increasing competition as more companies enter the enterprise space. The dynamic duo among new entrants is 2D-printing king HP Inc. and start-up Carbon (formerly Carbon3D), each of which recently launched a super-speedy 3D printer.

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HP released on May 17 its Jet Fusion 3D 3200, powered by its proprietary Multi Jet Fusion technology, following closely behind Carbon's April 1 launch of its M1 3D printer, powered by its proprietary Continuous Liquid Interface Production (CLIP) tech.

To help investors get a clearer grasp of these printers and the companies behind them, this article compares some key factors. It's not meant to be all-inclusive (we don't have enough data to fairly compare some critical factors related to parts quality), nor is it meant to suggest that HP and Carbon are each other's primary competitor.

1. Company type

HP Inc. Publicly traded, well-established tech company.
Carbon Privately held, pure-play 3D printing start-up founded in 2013.

Both companies possess certain advantages. HP's old guard status means it has an already-established distribution network and corporate connections. Carbon's start-up status means that it's likely more nimble.

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2. Leadership

HP Inc. Led by CEO Dion Weisler, a 25-year computer industry veteran, since HP spun off its enterprise business last November. The 3D printing unit is led byStephen Nigro, who's risen up through HP's 2D printing ranks.
Carbon Led by co-founder and CEO Joe DeSimone, a university chemistry and chemical engineering professor who is a prolific inventor and serial entrepreneur.

Weisler and Nigro clearly have more relevant and in-depth business experience than DeSimone; however, founder-CEOs like DeSimone are often incredibly driven to grow their "babies." Moreover, DeSimone is getting advice from the top venture capital firms funding the company, and likely from former FordCEO Alan Mulally, who joined Carbon's board last June.

Weisler, who has been with HP for about four years, led the company's global printing and personal systems group for more than two years prior to being selected to head HP Inc. Most of his 25-year IT career has been spent outside of the U.S. Prior to joining HP, he served as COOof one of Lenovo's business units. Nigropreviously headed HP's imaging & printing business, and early in his careerwas part of the team that developed HP's first color inkjet printer.

DeSimone is considered a leading authority on polymer chemistry. He'scurrently on leave asChancellor's Eminent Professor of Chemistry at UNC-Chapel Hill and Distinguished Professor of Chemical Engineering at North Carolina State University, and held 150 issued patents when I interviewed him last April. He's already leveraged knowledge gained in university labsto create products ranging fromanenvironmentally friendly dry cleaning solvent to nanocarriers for vaccines. These inventions led to companiesMicell Technologies and Liquidia Technologies, respectively.

3. Financials

HP Inc. $22.7 billion market cap; $3.7 billion cash on hand and $6.7 billion in debt at the end of the most recent quarter.
Carbon More than $151 million in VC funding raised since April 2015. Alphabet'sVC arm, Google Ventures, led a $100 million series C round last summer.

Advantage: HP.

Image source: HP Inc. HP's financial might will help further develop its Multi Jet Fusion tech.

HP is a behemoth compared with Carbon, and has gobs more cash. However, it also needs more cash to service its fairly hefty debt. The deciding factor here came down to cash flow. HP's existing businesses, most notably its 2D printer business, throw off a good amount of cash. Carbon doesn't have an existing revenue stream.

Beyond Google Ventures, new investors in Carbon's series C round included Russian billionaire Yuri Milner and Reinet Fund SCA FIS. Carbon's existing investors Sequoia Capital, Silver Lake Kraftwerk, and Northgate Capital also participated. Autodesk'sinvestment was converted to equity during this round.

4. Business model

HP Inc. Open source on software and materials ends; traditional sales-based distribution model.
Carbon Proprietary business model across hardware, software, and materials; subscription-based distribution.

Advantage: N/A.

It should be interesting to see how the two companies' widely different business models play out in the market. Like Carbon, 3D Systems and Stratasys both have proprietary business models across hardware, software, and materials. Like HP, their product distribution models are sales-based, though they also both have significant services operations.

5. Partner companies

HP Inc. Nike, BMW,Autodesk, Jabil Circuit, Johnson & Johnson, Materialise, Proto Labs, Shapeways, andSiemens.
Carbon Ford, Johnson & Johnson, Autodesk, top special effects shopLegacy Effects, and a yet-unnamed athletic shoe company.

HP's list of "partners" appears more impressive at initial glance. However, Carbon has yet to reveal the name of the athletic shoe company that's been testing its 3D printer. It's still possible the company is Nike even though the industry giant is on HP's list of "partners." After all, healthcare titan Johnson & Johnsonis working with both companies. Moreover, not all of the companies on HP'slist are truly "partners." Some are "manufacturers providing input," rather than "strategic partners" or "co-development partners," according to HP's press release.

The bottom line is that both HP and Carbon are working with some incredible companies, which should help them compete with 3D Systems and Stratasys.

6. Speed of 3D printer or technology

HP Inc. The Jet Fusion 3200 is reportedly up to 10 times faster than printers powered by the leading 3D printing techs -- fused deposition modeling (FDM) and selective laser sintering (SLS).
Carbon Carbon didn't provide a relative speed estimate for its M1 printer, which isn't possible since the printer uses proprietary resins. However, we know CLIP was 25 to 100 times faster than the leading 3D printing techs PolyJet, SLS, and stereolithography (SLA) when tested last year to produce the same 51-millimeter-diameter complex part.

Advantage: Carbon.

Image source: Carbon. Carbon's speed advantage is a result of its continuous printing process and lack of needing to print support structures.

Carbon's CLIP is currently faster than HP's Multi Jet Fusion, based upon what we know.

7. Current materials and color offerings

HP Inc. One material: PA12 (polyamide 12), commonly called Nylon 12. One color: black.
Carbon Seven resins that reportedly reflect the range of properties associated with commonly injection-molded thermoplastics. Six resins come in one color (three in black; one each in clear, blue, and amber), while the resin for general prototyping comes in six colors (cyan, magenta, yellow, black, white, and gray), which can be mixed to form unique colors.

Advantage: Carbon.

Carbon has the clear advantage here.It's been underreported that HP is currently only offering one material and subscribing to Henry Ford's famous words about the Model T: You can have it in any color "so long as it is black."

Both companies plan to expand their materials and color offerings. The importance of materials can't be overstressed. It doesn't matter how fast a printer can churn out objects if the material needed for a certain application isn't available. Color will also matter immensely in certain applications.

8. Pricing

HP Inc. Jet Fusion 3D 3200 starts at $130,000, while the full solution (includes processing station) starts at $155,000.
Carbon Basic M1 package: $40,000 per year. On-site installation and training: $10,000. Initial accessory pack (required, unless items are already owned): $12,000.

Advantage: N/A.

A customer will pay $155,000 -- or the price of HP's full solution -- for subscribing to Carbon's M1 package for about three years and four months (I did the math to give a point of comparison.) However, this isn't comparing apples to apples because of the printers' reportedly different capabilities, including speed.

Wrap-up

Both Carbon and HP appear to be shaping up to be compelling competitors to 3D Systems, Stratasys, and others in the 3D printing space, not to mention potentially some companies in the traditional manufacturing industry. However, it's much too early to conclude anything more definitive.

Investors shouldn't read into what I've written here and assume that Carbon and HP are each other's main competitor. That said, Carbon's M1 currently has the speed and materials advantages over HP's Jet Fusion 3D 3200, while HP has the deeper pockets. Both new printers have speed advantages over 3D Systems' and Stratasys' polymer printers, while HP in particular lags the industry's two largest players with respect to materials and color offerings.

The article HP Inc. vs. Carbon: How Do These Compelling New 3D Printing Entrants Stack Up? originally appeared on Fool.com.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fools board of directors. Beth McKenna has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A and C shares), Ford, Johnson & Johnson, Nike, and Proto Labs. The Motley Fool recommends 3D Systems, BMW, and Stratasys. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.