Mobility Is and Will Be the Force Driving the Robotics Market for the Next 10 Years

ABI Research recently released its most comprehensive tracker of the robotics market to date: Commercial and Industrial Robotics (MD-CIROBO-104). The forecasts therein paint a clear picture of optimism within the industry at large, but projections of growth rates vary widely between different subsectors, verticals, and robot-types.

There was a time when the major industrial robotic vendors. ABB, KUKA AG, FANUC, and Yaskawa, had huge influence on the market, and their fate was directly tied to that of the industry, but this is no longer the case. Following breakneck demand for industrial robots from 2015 to 2017, there was a noted deceleration in 2018, in large part due to the plateau in demand from China.

While generally overemphasized, challenges for the global manufacturing supply chain have affected the industrial robotics market. The slowdown in China has continued in 2019 and is affecting not just Chinese suppliers but also local Asia-Pacific vendors in South Korea and Japan.

The collaborative robotics market has not yet exceeded US$1 billion, so the scope for growth between 2018 and 2021 remains high. That said, Universal Robots, the market leader, has posted stagnant quarterly results in Q3 2019, as it appears a less optimistic outlook in the global manufacturing supply chain has stifled end user willingness to invest. This does not represent a long-term threat, and increased competition between nations in regard to issues like manufacturing, reshoring, and productivity growth makes future investment growth in collaborative robotics assured.

Amazon Robotics is the leader that has driven growth in mobile robotics for the last seven years since its acquisition of Kiva Systems. With 256,000 Automated Guided Vehicles (AGVs) deployed to date, Amazon holds close to 50% of material handling robot market share and is broadening its portfolio of robot subtypes with Autonomous Mobile Robots (AMRs) for transport and delivery. Other AGV developers like Quicktron, JD.com, Geek, Grey Orange, and more are deploying thousands of robots yearly, while AMR developers are just beginning to scale up. Brain Corp has deployed 5,000 systems, primarily in retail, and BlueBotics has deployed some 2,000 robots for intralogistics in and around the supplychain. Meanwhile, MIR, an AMR company acquired by Teradyne in 2018, is beginning to achieve growth rates in excess of the company’s other robotics acquisition and major cobot developer, Universal Robotics.

The distinction between AGVs and AMRs can be contested, but in essence AMRs do not require external infrastructure to localize themselves and are built with sensors and cameras to navigate their environments. Currently, AGVs represent the majority of mobile robot shipments, but by 2030 this will change. While there will be 2.5 million AGVs shipped in 2030, there will be 2.9 million AMRs. This is due to the declining costs of superior navigation and the desire to build flexibility into robotic fleets. Many new verticals, like hospitality, delivery, and infrastructure, will demand that systems that do not require external physical infrastructure move about. While the AGV market will thrive in intralogistics for fulfillment, the challenges faced by many manufacturers demand an incremental automation that does not require the wholesale changing of environmental infrastructure.

In a major example of automation extending to new and important vehicle-types, shipments of automated forklifts are set to grow from 4,000 in 2020 to 455,000 in 2030, with a Compound Annual Growth Rate (CAGR) of 58.9%. Meanwhile, the revenue for all mobile robotics is set to exceed US$224.8 billion by 2030, compared to US$39.5 billion for industrial and collaborative systems. Among the companies leading in this particular company are French manufacturer Balyo (which partnered with Amazon), Seegrid (which has sold over 800 units), and a number of smaller actors that are just beginning to scale. This oppurtunity is leading vehicle manufacturers like Toyota, Hyster-Yale, and Raymond to partner with robotics companies and brings automation capability in-house. Given that the global shipments for traditional forklifts is close to 1 million, there is huge scope for growth.

Another significant sector for mobile automation will be maintenance and cleaning. There are already over 5,000 autonomous floor scrubbers in U.S. retail stores and real estate, and with Softbank’s deployment of mobile cleaners for offices being rolled out in Asia and the United States, cleaning robots will become normalized throughout the service economy. ABI Research expects commercial cleaning robots will grow from US$155 million in annual revenue to US$18.3 billion in 2030.

Even more esoteric form factors, like quadrupeds, are expected to increase significantly for data collection purposes, particularly for real estate, construction, and industrial inspection. ABI Research predicts that quadrupeds, exemplified by vendors like Boston Dynamics, Zoa Robotics, ANYbotics, and Ghost Robotics, will increase to 29,000 yearly shipments by 2030, with a yearly revenue of US$2.9 billion.

As mature sectors of the robotics industry achieve growth more in line with established technology markets, mobile robotics is set to create lasting transformative effects across the supply chain and will become increasingly ambitious throughout the global economy.

For those taking a broad overview of the robotics market, such as telcos and chipset vendors, it is essential to take note of the mobile robotics opportunity and see that there will be significant demand for adjacent technologies to provide the infrastructure necessary to power such large fleets:

• 5G will be useful for developing multi-exchange computing that will allow large cloud service providers to handle the enormous troves of data provided by large robot fleets. This also applies to the projected increase in unmanned aerial systems.
• Despite the drive toward cloud- and edge-based computing to lower price point per shipment, there will always be a need for technical redundancy, as most robots are never far away from mission-critical applications where latency issues are ruinous. Therefore, there will be massive demand for improved processors to train algorithms on. In some cases, robots require the broad-processing capability offered by Nvidia Jetson or the System on Chip (SoC) provided by Qualcomm. In other cases, Application-Specific Integrated Circuits (ASICs) and Field Programmable Gate Arrays (FPGAs) will make more sense, as in the case of motion control and machine vision.
• Cloud service providers like Amazon Web Services (AWS) and Microsoft Azure need to capitalize on this market. They will be important brokers for companies that wish to scale up from being product makers to services, as they offer enormous public cloud infrastructure and a series of robotics-tailored tools to help with sterilizing increasingly complex fleets.
• Mobile robotics companies are enjoying the moment and even getting some of the blowback from excessive Venture Capital (VC) funding in self-driving vehicles. Many are expanding rapidly, but they need to focus on deployment as opposed to technology, and still face challenges regarding the extent of interconnectedness and keeping their promises of offering a vertically integrated solution.
• Industrial vendors, particularly the established vendors, have a tough short-term horizon. They are highly vulnerable to cyclical downturns, particularly in the struggling automotive industry, and have failed to develop new revenue streams by building market-leading robotics in nascent fields like collaboration. Risk-averse strategies and an emphasis on China have not worked as planned in 2019, with all companies negatively impacted by China’s downturn. Comau is a strong example of a company that relies too much on industrial robots for the automotive sector and is diversifying into mobile robotics, large cobots, and exoskeletons. The extent of its success is difficult to ascertain in the short term, but ABI Research suggests most large industrial players will look to expand their non-traditional robotic rosters in order to develop alternative revenue streams.
• In regard to cobots, despite some reduced expectations for the market leader Universal Robots setting the industry back, yearly growth remains over 30% for shipments and revenue. When accounting for both hardware and software revenue, collaborative robot revenue will increase from US$492 million in 2018 to US$19 billion in 2030. A lot of this growth will result from significant crossover between collaborative systems and industrial robots as newer models incorporate the benefits of collaboration, including force-sensing, improved haptics, superior control, and ease of use.
• Exoskeletons have remained on the fringes of the robotics market for decades, but are beginning to attract significant attention, as demonstrated by the release of the XO heavy suit from Sarcos Robotics. The total market, including active and passive suits in addition to software, will grow from US$300 million in 2018 to US$16.5 billion by 2030.This will be heavily concentrated in the 392,000 powered suits that will be deployed annually, especially for industrial applications and material handling. While many vendors deploying cheaper exoskeletons are using distributors and traditional business models, developers of more sophisticated systems, like German Bionic Systems and Sarcos Robotics, are opting for service models in which they maintain ownership of the exoskeleton, and thus responsibility for maintenance and customer service. Onlookers need to focus on and scrutinize vendors’ ability to provide sufficient Return on Investment (ROI).