Uncertainties in 2022 Will Be a Short and Bumpy Ride on the Long Journey of Mobile, Autonomous, and Collaborative Robots

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3Q 2022 | IN-6616

This insight discusses the impact of various headwinds on the robotics industry and key market trends for 2022 and beyond.

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Headwinds in Robotics


The year 2022 is turning out to be a challenging one for the technology industry. Despite being one of the most in-demand technological solutions in current times, robotics solution vendors are not spared from the following headwinds:

  • Macroeconomic Factors: As governments were racing to keep economies afloat, easing the money supply, combined with goods shortages and supply chain crises caused by COVID-19, led to inflation in the post-pandemic world. In response, central banks have raised interest rates to prevent overheating. As a result, businesses become wary of borrowing due to high costs, thereby making fewer investments in new technologies and hiring fewer employees.
  • Geopolitical Factors: Techno-nationalism has recently been on the rise, exacerbated by the Sino-U.S. trade dispute and the Russo-Ukrainian War. Countries also see robotics as a core technology they need to groom and invest in, leading to the emergence of robotics research hubs and local startups. In addition, foreign robotics vendors must comply with more stringent domestic regulations.
  • Pandemic Effects: COVID-19 is still ongoing. New waves of the global pandemic led by new variants continue to disrupt daily life. Determined to eliminate the virus, China has imposed severe lockdown protocols in vital economic hubs, straining its local economies and the global supply chain.

Layoffs Becoming More Common


No doubt these headwinds are already felt by some robotics vendors. Prominent robotics startups have announced their layoff plans. Nuro, a last-mile delivery robot company, made several roles redundant, while its main competitor, Starship Technologies, laid off 11% of its workforce. Fabric, a micro-fulfillment Automated Storage/Retrieval System (ASRS) technology vendor, has let 120 employees go, citing a change in its business model. The most significant layoff news comes from Pudu Robotics, a Chinese Autonomous Mobile Robot (AMR) vendor, which made a decision that affected hundreds to thousands of employees.

These layoffs are often the result of a pivot in corporate strategy or cost reduction measures, which is very common among startups. For instance, Fabric shared that it is pivoting from a service and network model to a hardware and software platform model. This is not surprising, as scaling and maintaining a large service base and network of fully automated micro-fulfillment centers is extremely costly. More importantly, all four startups are still staying in the market and plan to launch new products later this year.

Nonetheless, given that these four companies are among the most successful robotics startups in the Venture Capital (VC) market in recent years, the impact could be pretty significant. Combined, all four startups raised a total of US$2.8 billion in VC funding, with Nuro, Fabric, Starship Technologies, and Pudu Robotics receiving US$2.1 billion, US$336 million, US$198 million, and US$185 million, respectively. Due to favorable capital conditions and high market confidence, the VC market for robotics vendors rebounded post-COVID-19, reaching US$5.7 billion in 2021 with a 38% Year-over-Year (YoY) growth. However, with, these layoffs and the headwinds mentioned above signify more future uncertainties. ABI Research’s Robotics Investment Monitor 2021 (PT-2600) presentation forecasts less VC funding growth in 2022 than in 2021.

Robotics Remain a Growth Market


ABI Research’s current market forecast in Commercial and Industrial Robotics (MD-CIROBO-107) has the YoY growth rate for global shipments of collaborative industrial arms and mobile robots as being over 50%. This forecast should be considered an optimistic scenario, given the current market conditions. A more pessimistic scenario should see the growth hovering around 20%, with the growth rate recovering in the long run.

Plenty of signs point to the robotics market not heading south anytime soon. On the contrary, demands for robotics automation remain bullish. The International Federation of Robotics (IFR) reports a strong surge in industrial robot sales in June 2022. Warehouse automation plays a critical role in alleviating the global supply chain crisis. Mobile robots are widely adopted in outdoor applications, such as seaport automation, last-mile vaccine delivery, yard management, public venue disinfection, and crowd control. The Robotics-as-a-Service (RaaS) business model and hardware-agnostic robotics software solutions are lowering the barrier to robotics automation. This is why the growth rate for robotics software revenue remains achievable. As more robotics solutions are implemented, robotics software vendors are seeing growing demand for hardware- and brand-agnostic programming and configuration, fleet management, teleoperation, data gathering, design, and simulation.


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