This is the sixth post in a six-part series we’ve published on the future of robotics. Every day this week, we’ve published a detailed outlook on a category within the robotics market including details on our thesis, outlook and market size for each category.
While we believe domestic robots (e.g., vacuums, mops and lawnmowers) will be the largest robotics market within the home, we see other home robot markets quickly emerging in the form of social and entertainment robots. Entertainment robots are simply characterized as robot toys, but due to advances in artificial intelligence and specifically voice recognition and natural language processing, robots are now capable of interacting directly with humans. We characterize these personal companion systems as social robots, and they can interact directly with people by performing many routine tasks such as reminding people of important events and answering a growing list of questions. Over the next 10 years social robots will get smarter and more capable, which will expand the ways they interact with people. At the same time, these robots will become more affordable.
- Entertainment Robots: We characterize entertainment robots as machines in the form of toys, such as drones and remote control cars. The entertainment robot category continues to grow due to the lower costs of robot technologies. Today, robot toys can range from $50 to as high as $1,000, but over the next 10 years we expect the average price for toys to come down significantly, making robot toys affordable for more households.
- Social Robots: Best characterized as personal companions, social robots are systems capable of interacting directly with people. While the primary form of interaction is via voice control, advances in computer vision are allowing social robots to sense human movement, gestures and even emotions. Driven by innovation in artificial intelligence, social robots can also answer a growing list of questions. Today, the most common form of social robots includes the Amazon Echo and Google Home, but we anticipate newer and more niche platforms to be introduced that will go beyond these technologies capabilities.
Social and Entertainment Robot Market to Grow to $2.0B By 2025
According to the International Federation of Robotics, 1.7M social and entertainment robots were delivered in 2015, representing a $1.0B market opportunity. We believe the number of social and entertainment robots sold in 2016 increased 25.0% y/y to 2.1M. Due to lower robot costs, we believe the market value only increased 10.0% y/y to $1.1M. Looking ahead, we anticipate social and entertainment robots to see heathy growth, but due to lower robot costs from increased competition, we only anticipate the market to grow at a high-single digit market CAGR through 2025. While we believe there will be specific sub-markets within these categories to experience much higher growth, over time social and entertainment platforms will be commoditized and the value-add will come from application development. That said, by 2025 we believe over 7.4M social and entertainment robots will be shipped, representing a $2.0B market.
We believe robot adoption within in the home will extend from domestic systems performing household chores to robots engaging directly with humans in the form of social and entertainment robots. Due to lower robot costs and improved performance features, we believe robotic toys will be an in-demand gift among children across the globe for the next several years. And due to advances in artificial intelligence and computer vision we see robot companions becoming a much larger theme among children and adults alike. Given the advanced sensors and cameras now built into social robots, we believe these robots will help households become more interconnected. By connecting the robot to other connected devices throughout the home, consumers will be able to better monitor their entire house through a single interface. Increasing market awareness will be a core driver to social robot adoption. However, like other robotic categories lower robot costs and improved functionalities will help accelerate growth.
Austin Bohlig contributed to this note.
Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.