Rapid Prototyping Equipment Financing
Technology Trends:
Paying For The Price Of Progress
The issues we've raised about factory hardware maintenance, independent maintenance, software licensing, and materials should help you address the two big questions about RP platform procurement costs:
- What will each system under consideration really cost during its entire life in your company?
- Should you purchase or lease that system?
The answers you can reach at this stage are only tentative. Now you have to look at things that will affect the residual value of an RP system that you cannot control but which you can to some extent predict.
Each RP system has a life cycle governed by the general state of technology in the RP field and the product development efforts of the system's manufacturer. A system that is near the end of its production life and which will soon be eclipsed by a more advanced model is likely to lose more value than a system that has only been on the market a short time. However, there are some machines that are classics, or which become classics when a successor machine turns out to be disappointing.
The residual value of a classic machine will suffer less when a new model comes out, particularly if the new model is not as widely accepted in the field. You can find out how a particular platform is holding up, in economic terms, if that platform has been around for a while. All you have to do is try to buy a used model.
If the price is high, chances are you are looking at a classic. If the price is low, you can be pretty sure that a new one of the same type will have a very low residual value, or no residual value at all.
But be careful here: The RP systems market isn't a particularly efficient market. An efficient market is one in which there are numerous buyers and sellers and a good flow of information, one where prices fluctuate based on supply and demand. Supply and demand have an effect on RP systems prices, but only to a limited extent and only for the few systems that are popular enough and long-lasting enough to form a basis for trading.
If the system you have in mind is relatively new to the field, it won't have any reputation at all. That can work against a high residual value. However, if a system is similar to its predecessor, and if the predecessor has a very good reputation, it is fair to say that the new system is likely to enjoy a relatively high residual value, too.
You can't cash in on this good possibility if you buy the machine, at least not until you sell it. But if you lease a machine that begins its life with a good reputation, the lease will cost less because the lessor will be somewhat more optimistic about the system's likely residual value. You can also look at this issue the other way around: If a lessor quotes lease rates that reflect a poor residual value, there might be a reason.
Even if you prefer buying the RP system outright, you can always learn something by evaluating the cost of a lease and the reasons for that cost. Just keep in mind that the leasing company might be wrong.
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