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Social and Entertainment: Robotics Outlook 2025

Social and Entertainment: Robotics Outlook 2025

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.

See previous notes in our Robotics Outlook 2025 series here: IntroIndustrialCommercialDomesticMilitary.

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.

Bottom Line:

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.

Artificial Intelligence, Robotics
3 min. read Show less
Military: Robotics Outlook 2025

Military: Robotics Outlook 2025

This is the fifth in a six-part series we’re publishing on the future of robotics. Every day this week, we’re publishing a detailed outlook on a category within the robotics market including details on our thesis, outlook and market size for each category.

See previous notes in our Robotics Outlook 2025 series here: IntroIndustrialCommercial, Domestic.

While robots have been deployed in military applications for years, the number of unmanned systems used by domestic and international defense agencies continues to grow. Thanks in large part to improvements in computer vision and robotic functionalities, unmanned systems are now capable of accomplishing tasks better than traditional manned systems. Today, military robots consist of unmanned systems that operate in the air, ground, and sea. While unmanned aerial vehicles are the most common form of robots used by militaries, unmanned ground systems and marine robots are playing a bigger role in tactical missions. Given that these unmanned systems improve situational awareness, reduce a soldier’s workload and minimize overall risk to military personnel, we believe robots of all kinds will play a growing role in military operations over the next 10 years.

  • Unmanned Aerial Vehicles (UAV): Military UAVs take many forms, from drones small enough to hold in your hand to UAVs the size of manned fighter jets. Most of these drones can carry a wide variety of sensor payloads. Surveillance is primary UAV application in order to gather aerial intelligence. Military UAVs are typically more expansive than commercial drones, with pricing ranging from $50K – $1M+; however, due to technological advancements seen in commercial drones we anticipate pricing to decline steadily.
  • Unmanned Ground Vehicles (UGV): Similar to UAVs, there are different classes of military UGVs varying in size and payload capacity. Some UGVs are small enough for a person to carry, while others are the size of a tank. UGV applications include intelligence, surveillance, and reconnaissance (ISR) functions, as well as cargo transport. Compared to other unmanned systems, UGVs are superior when direct action needs be taken on the ground. For example, an attached robotic arm could inspect or deactivate a potentially hazardous material. Pricing for UGVs vary based on size and range from $10K per unit to as much as $100K+ for larger models.
  • Unmanned Marine Vehicle (UMV): UMVs include unmanned marine surface vehicles and underwater robots. While most UMVs in use today are cable of operating for multiple hours at a time, new UMVs can remain submerged for weeks at a time. UMVs are primarily used for marine surveillance, sweeping for mines, securing critical water passages, and serving as navel targets. UMVs are among the most expensive military robots in use today, with prices ranging from $200K for the low-end models to as high as $10M for high-end UMVs.

Military Robot Market to Grow to $2.8B By 2025

We believe a total of 12,336 military robots were delivered in 2016, which is up 8.8% from the prior year, and the total market value grew 6.7% y/y to $1.2B. We believe the vast majority of units were UAVs; we estimate that 10,330 military drones were sold in 2016. Over the next 10 years we anticipate UAVs will be a key focus within robotics for most militaries around the world. By 2025, we estimate that over 41K military drones will be delivered globally, representing a 16.2% CAGR and $2.1B market opportunity. We believe that the number of UGVs sold will increase from 1.9K in 2016 to over 5.9K in 2025, representing a $450M market opportunity. While we believe demand will be driven by all UGV classes, we anticipate faster growth among larger and more advanced systems.  While the category remains small from a unit standpoint today, we believe the UMV market will see healthy growth over the next 10-years and represent a lucrative market opportunity by 2025. We believe the industry shipped 131 UMVs in 2016 but expect 330 units will be delivered in 2025, representing a $260M market. UMV growth will be driven by further applications and use case development. In the exhibit below, we highlight our domestic robot forecast through 2025.

Final Thoughts

We anticipate the military robot market, which includes UAVs, UGVs and UMVS, to grow from $1.2B in 2016 to over $2.8B by 2025, representing a 9.4% 10-year CAGR. While it is not the fastest growing robotics market, we see unmanned systems playing a growing role within domestic and international militaries over the next 10 years. While we see unmanned aerial vehicles of all sizes garnering the highest percentage of total spend, we believe UGVs and UMVs will see healthy adoption. Note that we do not view UAVs, UGVs and UMVs as competitive to one another; rather, they are complementary military strategies. Lower robot costs and improvements in robot functionalities driven by innovation in computer vision and AI will be the primary catalyst to further adoption of military robots.

 

Next: Social and Entertainment Robots

In our final piece, we’ll discuss the emergence of robots as personal companions and toys.

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.

Artificial Intelligence, Robotics
4 min. read Show less
Domestic: Robotics Outlook 2025

Domestic: Robotics Outlook 2025

This is the fourth in a six-part series we’re publishing on the future of robotics. Every day this week, we’re publishing a detailed outlook on a category within the robotics market including details on our thesis, outlook and market size for each category.

See previous notes in our Robotics Outlook 2025 series here: Intro, Industrial, Commercial.

Due to advancements in computer vision, robot functionalities and, most importantly, lower component costs, adoption of robots is accelerating in both commercial and domestic markets. Domestic robots are systems used to perform household chores such as vacuuming, mowing the lawn and mopping. While home robot adoption has accelerated in recent years, we believe penetration rates remain low and foresee even higher growth in the future. Although we anticipate improvements in robotics functionalities and lower robot costs to accelerate growth, increasing consumer awareness of these technologies will be the primary growth driver. Currently, robotic vacuums lead the market in units sold, but with consumers becoming more comfortable with robotics, other technologies such as robotic lawnmowers and mops are starting to gain meaningful traction.

  • Vacuum: Robotic vacuums, or robovacs, were the first mass market robots to enter the home. Today, the robotic vacuum market accounts for the highest percentage of domestic robots in terms of spend and units shipped. Robovacs retail between $200 and $1,000, with the higher-end models offering longer battery life and WIFI-connectivity. Assuming robot vacuums only accounts for ~20.0% of global vacuum spend, we believe strong growth lies ahead for this domestic sub-market.
  • Lawnmower: We believe the robotic lawn mowing market is the second largest domestic robot market in the world. Today, robotic lawn mowers are most common in European countries due to the smaller average lawn size. Robotic lawnmowers are the most expensive domestic robots on the market today with prices ranging from $1,000 to $5,000. We believe the biggest growth catalysts include lower unit costs and improved battery endurance, especially in North America where lawns are much larger.
  • Wet Floor: The wet floor robotics market, which includes robots used for mopping and sweeping non-carpeted floors, is the third largest domestic robot market. Although small today, this domestic market has recently started to gain strong momentum across the globe. Specifically, wet floor robots are seeing strong adoption within Asian countries where carpeting is not the norm in most households. These robots are one of the least expensive of all domestic robots and retail from $150 to $300.

Domestic Robot Market to Grow to $4.4B By 2025

We believe a total of 5.1M domestic robots were delivered in 2016, which is up 25.5% from the prior year, and the total market value grew 25.7% y/y to $1.4B. We believe 4.1M robotic vacuums were sold in 2016. Over the next 10 years we anticipate the industry to see double-digit unit growth annually. By 2025, we estimate that 15.5M robot vacuums will be sold, which will equate to a $2.6B market opportunity. Meanwhile, we believe the number of robotic lawnmowers sold will increase from 340K in 2016 to over 1.4M in 2025, representing a 21.0% 10-year CAGR. Although we anticipate robotic lawnmower pricing to come down significantly from where it is today, we believe the market opportunity will exceed $1.0B in the next 10 years. While small today, we believe the wet floor market will see the highest unit and market growth over the next 10-years. We believe the industry shipped 570K wet floor robots in 2016. By 2025, we estimate that over 6.0M wet floor units will be delivered, representing a 33.9% 10-year CAGR. In the exhibit below, we highlight our domestic robot forecast through 2025.

Bottom Line:

We believe robot adoption within in the home is quickly approaching an inflection point. Consumers are relying on robot automation to perform daily household chores such as vacuuming, sweeping, mopping, as well as mowing the lawn. In total, we believe households will consume over 23.0M domestic robots by 2025, which equates to a $4.4B market opportunity. While we anticipate robotic vacuums to be the largest domestic sub-market, we believe robotic lawn mowers and wet floor products will also see meaningful adoption in the years to come. In addition, we believe advancements in computer vision and robot functionalities will allow new domestic robot markets to emerge. For example, companies today are beginning to leverage drone technology for home security applications. We believe the two largest catalysts to domestic robot growth will be lower unit costs and increasing consumer awareness of the capabilities of robotic technologies.

 

Next: Military Robots

In our next piece, we’ll look at the ways in which aerial, ground and marine robots are playing a larger role within U.S. and foreign militaries.

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.

Artificial Intelligence, Robotics
3 min. read Show less