The Rise of Customized Solutions. This is the scenario that most resembles today’s landscape. In this setting, applicable to an environment that has produced either only incremental technological progress or significant gains, no new volume use cases exist. Companies design robot systems to serve specific applications—maybe a raspberry-picking machine or equipment that can take blood samples—but these products lack the widespread demand to be scalable the way a robot in an automotive factory welding or paint shop was at one point. As a result, the initial price tags for these targeted robot systems are relatively high, and companies cannot hope to rely on volume manufacturing efficiencies to bring down costs significantly.
In this scenario, the assumption is that significant technological advances—such as vehicle autonomy capabilities—will only be useful or approved by regulators for a small subset of applications and won’t be ready for broad adoption. This will further impede the potential for volume sales and delay scaling.
This type of market would be dominated by small- to medium-size companies and startups with deep knowledge in specialized robot applications that can be tailored to customer requirements, while larger players are at risk of having a leading position only in their established application fields, such as automotive manufacturing. Separately, big software companies are not likely to have a dominant presence, but systems integrators already offering technology for specific niches may be able to design machines to up- and cross-sell in their existing customer base. Overall, though, companies that succeed would be highly customer centric and provide the most-targeted and customizable features at the lowest cost, in part by adopting readily available mechatronic equipment to enhance functions and capabilities.
The Robot as a Standard Automation Device. This market would be led by a range of less complex systems, relative to where technology is heading, but would include highly scaled machines that are easy to install, configure, and integrate. An example could include an in-house delivery robot, an autonomous picking robot, or an e-vehicle-charging robot. Generally, the mass-use cases in this category are not especially intricate and are so standardized that they can be designed and purchased online. Moreover, there are no regulatory or social acceptance barriers to be concerned about.
The prominent companies in this market would be providers of cheap mechatronics hardware that can leverage a mass application design for maximum scale. We expect that few of the current big players will fit into this category, in large part because they tend not to be cost leaders, which is essential to market-standardized devices. However, although standardization is the crucial feature, some niche companies will be able to profit from using their expertise in specific areas to provide non-customizable products for specialized fields.
To take a leading position in this scenario, established companies would need to lower their design and manufacturing costs and improve their capabilities in hardware and software joint ventures. To profitably manufacture standardized devices, big companies would have to view themselves as hardware suppliers, using software from partners and industrywide platforms to piece together finished products.
Google World. In this final scenario, breakthrough advances in machine intelligence, physical adeptness, and connectivity result in a spate of smart robot modules handling complex and dynamic situations. These modules can be interchanged using simple plug-and-play concepts, expanding robot environments and uses immeasurably. Out of this, volume growth is driven by multiple elaborate use cases at a much higher price point than standardized robots. Because of their technological flexibility and intelligence capabilities, these robot modules can be customized for a broad suite of applications.
Some of the more creative and powerful potential applications will be in the category of mobile robotics, based on machine and vehicle fully self-driving technologies. The biggest growth area is likely to be in professional services robots (rather than the more traditional industrial robots), including autonomous hotel and consumer delivery equipment and railway or airport maintenance robots.
In this market, software will be the key success factor, and software large scalers, hyperscalers, and other digital startups will dominate. Traditional robotics companies are in danger of becoming tier 1 and tier 2 suppliers in this scenario, providing mechatronics equipment to suit the innovation and software platform standards that the software companies are generating. Mechatronics would, thus, increasingly become a commodity with the only possible potential for differentiation being in performance and quality.
By our estimation, each of these scenarios is equally possible by 2030. The wildcard in the mix involves how quickly new machine intelligence technologies and other digital advances can be brought to a point where they cost-effectively drive the development of mass applications. However, the trend lines are obvious: in the overall robotics market the shift toward a Google world is inevitable, and this scenario will almost certainly be prevalent in the next couple of decades.
With the timing of these developments uncertain, robotics companies must choose which strategy fits their business today and best positions them for the future. The available strategic options are applications play, product play, or software play. (See Exhibit 3.)