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For decades, commercial-grade robots have mostly been large stationary industrial machines in caged areas on factory assembly lines away from human interaction. But a new generation of smaller, cheaper, smarter robots is starting to work alongside humans in a host of commercial settings, Piper Jaffray analyst Troy Jensen said in a research report Friday. “These new robots are no longer just capable of performing simple, redundant tasks, but are now able to operate in advanced environments working alongside people,” Jensen said. “Although we believe we are in the early innings of robotic adoption, we see an inflection coming close and believe the market opportunity is large for these more-advanced robots, or what we call ‘Next Gen’ robotics, in industries such as defense, e-commerce, health care, oil and gas, and agriculture, as well as within the home.” The robotics market, including industrial, military, commercial and consumer systems, rose 13% in 2014 to a record $16.7 billion, and most of that spending ($10.7 billion) was on large industrial machines, he said. He didn’t have 2015 spending. “With robotic demand heating up across many different industries, we believe the total market can sustain a 10%-plus compound annual growth rate through 2020, and anticipate some of the faster-growing segments, such as collaborative robots, autonomous guided vehicles and commercial drones, can sustain 20%-plus annual growth levels for the next several years,” Jensen said. While the number of companies developing next-gen robots has increased dramatically in the past few years, the number of publicly traded robotic companies today is still relatively small, he said. Of the big four industrial robot makers, only ABB ( ABB ) of Switzerland has stock traded on a major U.S. exchange. The other companies are Kuka of Germany, and Fanuc and Yaskawa of Japan. Next Up In Robotics: Co-Bots The next generation of industrial robots are collaborative robots, also known as co-bots, Jensen said. Unlike traditional industrial robots, co-bots can work safely alongside humans in uncaged environments. This opens up new opportunities for small and midsize companies to use them in factories, warehouses and other settings. Leaders in the collaborative robot segment include ReThink Robotics and Universal Robots, acquired last year by Teradyne ( TER ). Co-bots have greater flexibility and lower cost of ownership than big stationary industrial bots, Jensen said. These bots cost $20,000 to $50,000 apiece, compared with large stationary factory bots costing $100,000 to $500,000. Another growth area in commercial robots are machines used in logistics. These robots can fetch and deliver items in warehouses, hospitals and other settings. E-commerce leader Amazon.com ( AMZN ) has deployed 30,000 such robots to work in its fulfillment centers. It makes its own robots, thanks to its 2012 acquisition of Kiva Systems. Tech giant Alphabet ( GOOGL ) is also interested in advancing the field of robotics. It has purchased several companies, including Boston Dynamics, which earlier this week unveiled its next-generation humanoid robot, called Atlas . Other key growth markets include military robots, commercial drones and professional and consumer cleaning robots, Jensen said. The leader in home cleaning robots is iRobot ( IRBT ), best known for its Roomba vacuum. This month, iRobot said it would sell its defense and security robot business to a private equity firm so it could focus on home robots. Last year, robotic companies raised about $923 million in private equity and venture funding. That’s up from $340 million in 2014, $250 million in 2013 and $220 million in 2012, Jensen said. The largest share of funding in 2014 and 2015 went to drone companies. Over $300 million of last year’s total funding went to drone makers, up from $100 million in 2014, Jensen said. Drone makers DJI, 3DR, Aeryon Labs and Yuneec each raised more than $50 million last year. “Although we are bullish on robots in a number of new industries, we believe this is only the early innings, and we expect to see better, faster and less-expensive robots in the coming years,” Jensen said. Scalper1 News
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