Industry Analysis Consultancy,
The robotics industry is becoming the focus of many investment companies, funds and individuals looking for a future friendly, and yet relatively stable investment. The big players have been established for many years and indeed are often parts of much larger industrial groups, spreading risk across several sectors. Many are cash rich and highly profitable for manufacturing companies. There is also the promise of rapid expansion. The media coverage of the industry, some of it at fever pitch and with more than passing reference to the movies, keeps robotics’ profile high.
So you have an investment fund and are looking to add the exciting, futuristic, and hopefully profitable robotics sector to your portfolio? There are several obvious choices and indeed their current prices are listed in the tickers at the bottom of the page, but the difference between having a gamble and knowing the industry can make a real difference.
Below are some thoughts on the state of the industry presently and the direction in which I believe it is likely to go. I offer industry analysis and advice on investing in robotics. Having been in the industry, dealing directly with these companies on a daily basis, and not just locally but globally for many years I can give perspectives that few others can. Contact me for more details.
The robot industry is undergoing a period of rapid change. For investors in robotics manufacturers it is important to understand the nature of the market, as there have been significant movements in prices as perceived market positions shift.
For decades there has been a promise of a robot revolution as robotic equipment has been capable for some time of significantly changing many industries. However, with a few exceptions robots are yet to have the impact promised. This has simply been due to cost. A large part of this cost is programming and set up costs that have caused payback of robot systems to be measured in years.
Industrial robot companies often sold the robots themselves to their main customers in the automotive sector at close to a loss, and then recouped a profit in programming and servicing costs. This in turn caused an incentive to keep programming and service costs high. Robot controllers have been improving certainly, becoming more capable, but also more complex. Good, experienced robot programmers are difficult to find and cost £1000 a day or more.
In the used robot market it has been possible to buy the hardware to automate a process very cheaply. A perfectly capable ex car factory robot could be purchased for £5000. The problem comes in the installation and programming. The know how to install an industrial robot would usually be around £10,000 even for a relatively simple application.
Now, robots have finally started to become intuitive to program and easier to install. The first company to do this was Universal Robots of Denmark. Started by three young engineering students who had experience with existing industrial robots they knew there had to be a better solution. The Universal robot is not as fast, powerful or capable as many on the market. Rather it is easy to use, even for complete novices – minimising or removing programming cost and making robots cost effective in many new applications.
The scramble to emulate Universal Robot’s rapid expansion into new markets has been interesting to see with much talk of collaborative robots (see robot types to learn more about the specifics) but it should be noted that the collaborative nature of Universal Robots is not the key to their success, but rather the cost saving that their easy programming and installation brings. For many of the large robot companies this means a reorganisation of their business structure as much as changes to their robots.
This backdrop is important to inform any investment decision in the robotics industry. For consultancy on the industry and the specific merits of investing in robotics companies Contact Me.