NTT’s recent entry into consumer robotics suggests that it’s not just about Google vs Amazon, or Softbank vs NTT anymore, but about telcos vs big data companies. With two major and distinct sectors now competing for market share in consumer robotics, will this impact the way the whole robotics industry evolves?

In the winter of 2013/14 major league US-based big data companies like Google, Apple and Amazon propelled robotics into mainstream news when they started buying and investing in robotics companies like Boston Dynamics, Kiva and Nest. The world was wondering: why do all these consumer-focused big data companies suddenly care so much about robots? Now it seems that the big data sector is not the only one with its eye on robotics. This spring Japanese telecommunications firm Softbank acquired Aldebaran’s Pepper robot, and just yesterday, the competing and much larger Japanese telco NTT announced it would be partnering with consumer robot manufacturer Vstock to offer its Sota robot to consumers on a subscription basis.

Is this a signal that the telecommunication sector will become just as interested in robotics as big data companies are?

The two Japanese telcos will be leveraging their robotic acquisitions/partnerships to market their core business – communications services like networking, broadband and data delivery – to their massive existing consumer base. For telcos, this seems a logical extension of the cell phone business model: the device itself is a loss leader and the revenue earned is in the subscription fees. Softbank will be charging about $1600USD plus a $30USD subscription fee for the consumer model of Pepper, and  about $440USD/month for the recently announced enterprise model. NTT will be charging about $800USD with a monthly service fee of about $30USD for Sota.

These rates are far higher than a smartphone, and so it remains to be seen whether customers can see added value in the service over existing ones. Success may hinge on first developing niche markets, for example healthcare. Indeed NTT says it will roll out Sota as a companion robot in seniors homes next March, and Softbank’s first corporate customer is Nestle, who will be soon be launching Pepper as a marketing and service assistant in its Nescafe stores.

It remains to be seen whether, when, and how far telcos in other countries will latch on to the same trend. Softbank and NTT are located in Japan, whose population has a general love and affection for robots, and has traditionally had a strong consumer support for technology. The government of South Korea is active in marketing robotics to its people (they are even building a giant theme park dedicated to promoting robot tourism) and also seems like a good candidate. South Korea’s two top telcos, SK Telecom and KT, have both launched consumer robots. About taking Kibot into global markets, Seo Yu-Yeol, president in charge of KT’s Home Business Group has said:  “We continue to conduct market surveys on each country’s network infrastructure such as broadband and WiFi services.”

There are surely others.

But returning to the original question of telcos vs big data companies … is it a stretch to say this is a game changer? Compare the fledgling consumer robotics industry to the early auto industry, where the oil, gas and electricity sectors all fought for influence. The oil sector largely won out and we have the gasoline-powered car; and it’s no coincidence that Elon Musk is invested in both electric cars and solar power … Through the eyes of the energy producers, the car is just a delivery vehicle for energy consumption.

Or perhaps it’s not telcos vs big data companies at all, but rather telcos AND big data companies. As evidenced by the Uber and Airbnb, the continuum between carrier, medium, data and service is getting blurrier by the day.

Either way, with these sectors driving the next wave of the consumer robot economy, how will this shape how we use, interact with and consume robotics technology? To paraphrase Frank Tobe in his recent Robot Report newsletter, it could be that: “We are watching robotics turn from industry to ubiquity before our eyes.”

Following an in-depth discussion on the topic at Robohub’s editorial meeting today, it seems at this point there are many more questions than answers …

• Is this even a game changer? or is it just hype?
• Which sector – big data or telco – is better positioned to capitalize on consumer robotics? Or will these sectors work together in partnership?
• Will we see a ‘dumbing down’ of social robotics systems as they become mass marketed consumer products? Or will the competition between telcos and big data inject energy and money into R&D ?
• How will niche markets, such as healthcare or service industry, impact the development of social robotics?
• Are there substantive differences between social robots vs. the other smart devices that telcos are currently using to deliver their services? Or in Noam Chomsky’s words: Is the medium the message?
• How will all this impact robotics research and development? Will it benefit or harm the robotics community?
• Will we see a regional consolidation of telco investment, for example in Japan? When will telcos from other countries jump into the market?
• How does telco involvement impact privacy issues?
• Will this help usher in robot-as-a-service (RaaS) as an accepted business model?

To explore these questions, and many others, Robohub will be renewing our focus series Big deals: What it means to have the giants investing in robotics (started back when the Googles and the Amazons were first getting into the fray) to explore how telcos might be changing the game.

Interested in joining the discussion? Leave a comment below or email us at info@robohub.org with your contribution ideas.

A special thanks to Robohub team members Andrea Keay (@robotlaunch), Sabine Hauert (@sabinehauert), Adriana Hamacher (@AdrianaHamacher), John Payne (@lacyiceplusheat) and Audrow Nash for their stimulating discussion and input. 

If you liked this article, you may also be interested in:

• Japanese telcos vie for share in consumer robot-as-a-service business
• Softbank will take pre-orders for enterprise version of Pepper starting Oct 1
• Forget Google and unicorns, Asian dragons are going to dominate robotics
• Foxconn and Alibaba invest in SoftBank Robotics as Pepper goes on sale in Japan
• Nestlé 1st big buyer of Softbank’s Pepper robot
• Natural language: The de-facto interface convention for social robotics
• The second wave of social robots is here

See all the latest robotics news on Robohub, or sign up for our weekly newsletter.

Clever ads that emphasize ROI, presentations that show production benefits, new robot sales records, capital expenditure for warehousing systems and increased attendance at trade shows are all focusing attention on the business case for robotics.

The Robotics Industries Association (RIA) reports that North American robot sales set new records for the first half of 2015: 14,232 robots, valued at $840m, were ordered during that period. Sales in the semiconductor sector (30%), automotive components (23%) and life sciences (8%) increased strongly. In contrast, orders to automotive OEMs were down 18% from their record highs in 2014. In March,  RIA offered an in-depth return on investment calculator and tutorial by Tanya Anandan. Anandan also produced a more recent article about how new robots are using various sensors and cameras to raise their IQ. Bottom line: as sensors, cameras and CPUs get cheaper and more capable, they are enabling robots to sense, see and do more at less cost.

The Robot Report’s monthly recap of fundings, IPOs and acquisitions has confirmed the broadening interest by business and finance. Funding in the first six months of 2015 was greater than for all of 2014 and the number of strategic acquisitions has grown as well.

One of the presentations at the recent Automation World Conference described a recently built facility in the sweet potato business. Utilizing camera-aided sorting systems, automated case erection, weighing and filling stations, and robotic palletizing and shrink wrapping systems, the new facility now only requires about 40 people to ship 50,000 lbs/hr where it used to need 75 people to ship 20,000 lbs/hour. The control software also allows the firm to put unique codes at the item level that enables complete track and trace details from farm to warehouse to packaging to consumer.

In a recent advertisement, Universal Robots (UR) describes how a medical device maker freed up 11 full-time workers to handle more complex tasks when they deployed three UR robots. The ROI on those robots was less than six months. “We were looking at cost, accuracy, ease of implementation and ease of use. The Universal Robots nailed it in all those areas,” said their Director of Engineering.

Three industrial robot trade shows this year — Automate, Promat and CIROS — have all drawn record crowds, had greater floor space and more exhibitors. At Promat, which focused on material handling, warehousing and distribution center automation and robotics, the consensus was that the show produced more orders than any previous event.

All of these disparate items, when combined, imply a serious business case – and growing momentum – for the deployment of robots.

$11.2 million to Virtual Incision, a startup developing robotically assisted surgical devices, and another $11 million to Jibo, the company founded by Cynthia Breazeal of HRI fame from the MIT Media Lab. Money continues to flow to robotics. 

Jibo, Inc., the company behind the social robot Jibo which last year had the successful $3.7 million Indiegogo crowdfunding, is now focusing their partnering to those that are strategic and concentrate on the Asian market. The lineup of investors in this $11M add-on to the previous $25.3M Series A round includes:

• Acer, a Taiwanese hardware and software manufacturer
• Dentsu Ventures, a Japanese VC with a focus on marketing, media, social media and design
• KDDI, an Asian telecom carrier (read on to see how other telecom companies, namely NTT and SoftBank, are also investing in social robots)
• LG, a Korean telecom operator and manufacturer
• NetPosa, a Chinese online services provider

With this $11M, Jibo has now raised $38.6M and has announced a production schedule beginning in late Fall 2015 and through Spring 2016 for crowdfunded orders and preorders. Additional orders are waitlisted. 

It's easy to see that this round of funding focuses on the a serious expansion into the Asian market - the same marketplace where SoftBank and partners Alibaba and Foxconn are bringing their Pepper robot to market and NTT and Vstone are readying their Sota companion tabletop robot to compete. All the telcom giants want to participate in this new trend toward home social robots and devices to get the monthly Internet service slice of the pie. SoftBank is charging $100 per month for Pepper's connection services.

Virtual Incision Corp., a developer of an in vivo mini-robot surgical device enabling minimally invasive colon and abdominal procedures, received $11.2 million which brings their total funding to date to $25.7M. Virtual Incision's robotically-assisted surgical device is an investigational device and is not commercially available.

In their press release VIC said the funds will be used for a feasibility study on the use of the company’s miniaturized robotically assisted surgical technology for colon resection, a procedure performed to treat patients with lower gastrointestinal diseases such as diverticulitis, Crohn’s disease, inflammatory bowel disease and colon cancer. 

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GreyOrange, an India and Singapore-based materials handling startup, has received $30m in equity funding to ramp up production of their Butler shelves-to-picker robot system.

GreyOrange currently has more than 300 employees, a number it plans to double with this new funding. The company has two products: a package sorter and Butler.

Butler is a square version of the circular orange-colored robotic system that Amazon acquired from Kiva Systems in 2012. The Kiva process had proven invaluable in speeding up the transportation of goods from the warehouse, dynamically storing them for best access and shuttlling them to pick and pack work stations — all reasons why Amazon evaluated and then purchased Kiva for their internal use. The Butler version purports to do the same set of tasks. GreyOrange’s list of clients are distribution center-based and include Flipkart, the Indian version of Amazon, Amazon India and Delhivery, an integrator and provider of distribution center systems throughout India.

Two questions come to mind about the GreyOrange funding:

• Why was it needed?
• Does their technology infringe upon Kiva’s and Amazon’s?

Kiva Systems and Universal Robots were, and still are, two robotics stars robotics. They both sold for phenomenal amounts and they were both predominantly funded from their rapidly growing sales.

• Kiva Systems, which sold to Amazon for $775m in 2012, had previously received $18.1m in three rounds of funding. An ex-Kiva employee said, “it was simply growth: new customers provided partial payments for their systems upfront, and that was used to grow the company.  As long as you are growing quickly, you can actually have positive cash-flow.  Eventually profits kick in.”
• Universal Robots was initially funded by a Danish semi-governmental group but was subsequently self-funded, in a similar manner to Kiva, up until they sold to Teradyne for $350m earlier this year.

Recently, Farhad Manjoo wrote in the NY Times about the propensity of startups to stay private. He cited executives not wanting to give up control or subject themselves to regular scrutiny by those that don’t really understand the business. This trend is causing valuations to differ for private as opposed to held publicly held companies (privately held valuations are higher). It is also causing public investors to miss out some of the successful companies in this new growth industry.

In John Markoff’s new book Machines of Loving Grace he describes the principle on which the Kiva system was developed:

Kiva Systems had the insight that the most difficult functions to automate in the modern warehouse were ones that required human eyes and hands, like identifying and grasping objects. Without perception and dexterity, robotic systems are limited to the most repetitive jobs, and so Kiva took the obvious intermediate step and built mobile robots that carried items to stationary human workers. Once machine perception and robotic hands become better and cheaper, humans could disappear entirely.

Finally, a word about IP (intellectual property, in the form of patents and copyrights): GreyOrange has to be on Amazon’s radar for possible IP infringement. I am presuming that GreyOrange has vetted their IP versus Kiva/Amazon and concluded that they are unique enough to not cause legal problems.

Peloton Technology, a Silicon Valley startup providing truck platooning technology, got $17 million from some strategic investors after receiving $16M just a few months earlier in April.

Denso Intl. was the lead investor in both funding rounds. Denso is a Japanese robot maker that also provides technology and components to the global auto industry. In this latest funding, Intel and Lockheed Martin were also participants.

Peloton's technology uses vehicle-to-vehicle and vehicle-to-infrastructure wireless and radar to pair trucks to travel closely together. This creates an aerodynamic system but also a way for the trucks to communicate with each other to enable safe following, improved braking and reduced fuel costs.

Denso, besides being a provider of robotic arms for over 50 years, is also a provider of adaptive cruise control systems to the auto industry and V2V (vehicle-to-vehicle) technologies in general.

Adaptive cruise control is not technically a robot but it is robotic-like in nature and Peloton's truck platooning technology falls into that ever-growing new category of robotic-like functionality.

Read more

Launched in 2009 by a group of Waterloo engineering students, Clearpath‘s unmistakeable bright yellow and black robots have become synonymous with unmanned vehicle research in university research labs around the world. Now, as the field of robotics matures, Clearpath is forging into industrial applications, too. We caught up with CTO Ryan Gariepy at the 2015 Field and Service Robotics conference (FSR), to talk about their roots in research, the role of ROS and open source in their business model, and the challenges and opportunities of launching a robotics startup in Canada.

[HS] You got your start in the business of robotics while you were still a student at Waterloo. What made you decide to launch a robotics company at that time? Did you have a specific project or technology you were developing that made you think, “Hey, this could actually be useful out there!” …? Or was it that you saw the potential in the field more generally?

[RG] We started Clearpath right out of university in 2009 as we finished our undergraduate degrees – I did my Masters at the same time as we were getting off the ground, which is generally regarded to be a bad idea in terms of stress levels. It’s hard to believe that we just celebrated our sixth anniversary this year.

Starting the company was less about the technology and more about the potential … we just looked at everything around us and said, “Why do we have to shovel snow? This can be automated. Why do we have to do any work that does not require human creativity?” There are a lot of dangerous jobs out there that most people don’t realize are performed on a daily basis by tens of thousands of people in order to keep society going, like mining, farming, construction, stocking warehouses. And yet we need fuel and food and buildings, and we want our same-day deliveries from the Internet. There is a demand for this kind of work to take place.

Around the time we were starting out, Google Maps was getting off the ground. The concept of having information available at your fingertips was also becoming compelling and valuable to people, and the best way to get information about the world on a constant basis is to involve robotics or automation in some form. At the same time, sensors and the cost of sensing were improving due to the rapid uptake in smart phones; we were seeing advances in laptops, smartphones, and electric and hybrid vehicles driving down costs and improving battery density.

All of this was coming together and we felt that autonomous robotics was possible at a relatively high reliability and low cost, especially when compared with what had been done before.

What would you say have been the biggest changes that you’ve seen in the field of robotics since then?

I think one of the biggest changes is simply that people now accept that robotics, automation, and intelligent systems can actually solve some of their problems.

This recognition means that there are a lot of opportunities out there, both in terms of hardware and software. In some industries – ones that have been around for a long time – they already know how to build solid hardware that could be made robotic, but they need the right parts and the right software to automate it. Then there are other industries that need full solutions. There are a lot of pieces starting to come together now.

Your early customer base was made up of mainly universities and research labs. Do you find yourself getting pulled into a different direction now that you’re expanding more into industry?

The research market is definitely maturing and our product development cycle within that side of the business is very well understood. We’ve released two completely different platforms in the last eight months alone.

Now we are in a position where we can leverage the experience we gained from the R&D market to address challenges in industry. We are actively pushing the development of full robotic solutions (including software), and will soon be releasing a new platform along these lines.

How do you manage the problem of building in more than one direction at the same time?

One of our biggest challenges is that there is no one single clear challenge, especially at the scale we’re at right now. At this stage there are many things that need to be focused on: sales, operations, quality assurance, new features, understanding where the market’s going, product management, marketing … so the challenge is more about managing the priorities of any given department.

How do I provide guidance to the team so that they can spend their time on the right tasks? How do we remain dynamic as a startup? How do we remain flexible enough to change direction quickly if we need to, but still be stable enough to stick to our core values? These are the kinds of questions we are dealing with.

Speaking of core values, Clearpath took a chance from the beginning by focusing on open source and ROS. Does open source make for a good business model?

One of the reasons we looked at open source was the philosophy that no matter how large a company we become, there will always be more smart people who can build and program robots outside our company than within it. So it’s only logical that we work with whatever the community ends up creating around open source robotics, both to reinforce the community, and to hire from it.

That said, from a business model perspective it is more complicated. There are many companies that succeed with open source, but there is still no clear-cut model for building an open source company – and that tends to make people nervous. And yet by now we’ve seen several companies build on open source, including Google and Facebook, and it’s the same thing as building a startup on a LAMP stack: yes, you use open source and you may push back some code to open source, but you still have value you’re bringing on your own.

Earlier on we sold only hardware, which is easier to protect. Now that we’re getting into software sales, open source creates additional considerations for us, but it still hasn’t been an issue. Building on open source makes us more effective, and it certainly helps us engage much more with the robotics community.

Now that you’ve done all the legwork of developing the product and proving the market, do you have any concerns that another company with more resources could just come along and say, “We know who their buyers are, and we know what their markets are, and we can imitate their products …”?

Clearpath is sponsoring the 2015 Robot Launch “Open Source Robotics” Award, offering 10 hours of ROS consulting services to the winner.

ROS is open source and we contribute a lot back to it. We test a lot, we support people, we contribute drivers, and we contribute utilities back. However, the work that we do on autonomy and in controls –planning, mapping localization, interfacing, vehicle management – is not open source. We may open source parts of it in the future as we advance our state of the art, but the ‘secret sauce’ is still closed, even though it’s built on ROS middleware.

Could it make life easier for our competitors in some cases? Yes, but by the same token nobody makes money on having a better robot-logging framework, for example, and everybody saves money by having a good free robot-logging framework. If a better logging framework is your only competitive advantage, it’s not really an advantage, is it? Personally, I’d rather not spend money on a logging framework, and spend more to compete on the actual value that we bring to our clients.

You mentioned snow shoveling as one of your inspirations, which is a stereotypically Canadian problem. Did the Canadian climate and landscape figure into your business plan from the beginning? Is that why you wound up in field and service robotics, as opposed to some other application area?

Of course our robots can survive the winter – we’re Canadian!

One of our competitive advantages is the terrible weather we have in Canada. We have harsh winters, we have a lot of forestry, a lot of primary resources to mine and harvest, and we have a lot of space that is sparsely populated, which makes it easier to do testing. We also happen to have a very well developed technology ecosystem here. When you put those things together, it’s natural to lean towards field robotics.

When we started there were very few platforms out there that could actually do field robotics, and so we set that as our first niche.

How is the Canadian business landscape for robotics?

Many of our first customers were Canadian universities, some of which are leading the way in robotics integration and research. Meanwhile, Industry Canada is looking at how robotics technology can be adapted to existing manufacturing clusters in Southwestern Ontario, like the auto sector, which took a hit when the North American auto industry had a downturn. Canada also has strengths such as communications and optics, which naturally extend into robotics. It also helps when we can do business with Canadian suppliers; we get our GPS’ from NovAtel, which is based in Calgary, for example.

That said, as a Canadian company you’re forced to go multinational almost instantly because there isn’t enough of a robotics market in Canada to stay Canadian for long. We recently announced that we’ll be expanding office space into Silicon Valley and a primary reason for that is because of the opportunity that is available in the US market. Regardless, the Waterloo Region will continue to be Clearpath’s ‘home base’ for the foreseeable future.

People now refer to Waterloo as ‘Silicon Valley North’. What’s changed in the incubation space where Clearpath grew up since you launched?

It used to be that investors and venture capitalists would demand that you move to the area where their office was, which was typically Boston or New York City or Silicon Valley, but that’s not always the case anymore. Investors are starting to recognize that there are also benefits to being in other locations, especially for startups. Waterloo has a very dynamic tech community. It’s also a quarter of the price to buy a house here than in some of those larger US cities, and the time it takes me to get to work is 10 minutes, which makes it pretty livable and affordable compared to Silicon Valley. We found that VCs are now willing to accept that good ideas and businesses can grow and thrive in other areas as long as these areas have the right attitude – and Waterloo certainly has that.

Take the displacement of BlackBerry employees for instance – quite a few very smart people who were working at Blackberry have moved on to bring their skills and experience to other industries. We’ve hired a number of them, and a number of them have gone off to launch their own startups.

On top that is the continual increase in the brand of the Waterloo Region, and specifically the University of Waterloo (UW), as the place to go for getting a great education and practical experience that can lead to entrepreneurship. YCombinator’s Paul Graham has noted that UW has a fantastic record for turning out very strong companies, specifically hardware companies.

The other change worth mentioning is that Clearpath isn’t alone. The first group of startups that came out of UW includes Pebble, Vidyard, and more recently Thalmic Labs. These are all people who have graduated from UW’s engineering program within a few years of each other.

Does that help, too? Having a cluster that’s grown up together?

It certainly does.

Take recruiting, for example. When you’re hiring someone it helps prospective employees to know that there are other options. Clearpath has hired quite a few people from outside the region and if you’re taking a risk and moving a few thousand kilometers to join us, it’s good to know that there are other companies around, whether it’s for future growth opportunities, shared interests, or participating in knowledge transfer. For prospective employees, knowing that you can get back on your feet if you need to, or that your partner can find a job in the region, is very useful.

There is also something to be said for being part of a startup community. We all know each other, and we try to mentor each other. Even if you’re not working in exactly the same market, you can look at other startups and see them succeeding – and this is evidence that you can do it too.

Established in Berlin in 1847, and with a presence in Silicon Valley since the 1950s, Siemens invests more than $1B in the US each year for research and development. Now their Technology to Business team (TTB) has launched the Frontier Partner program, which aims to give startups in robotics and 3D printing a head start by providing them with software and resources to accelerate the development and manufacturing of their products. We spoke with Director of Strategy for Siemens PLM Software, Andy Swiecki, about why Siemens is focusing on robotics right now, and what startups can expect to get out of the Frontiers program.

[AK] Hi Andy, could you introduce yourself and tell us about Siemens Frontier Program? 

[AS] Hi my name is Andy Swiecki, I’m with Siemens PLM Software. I’m part of our strategy division and I work with a lot of our third party software and technology partners. One of the programs I work with is the Frontier Program, which is set up to support startup companies working in technology areas that are of interest to Siemens.

Two of the initial technology areas are additive manufacturing, or 3D printing, and robotics. We rolled out the Frontier Program at the end of 2014. We have a fair number of 3D printing companies that are part of the program – startup companies that are looking at new innovative technologies – and we’ve recently expanded it to include robotics. We are looking forward to getting more companies that are in the startup stage to join the program and work with Siemens technologies as they develop their company and their technologies.

Siemens has been looking at startup innovation for more than 15 years with the TTB program. What is the driving motivation to look at robotics, and what sort of robotics are you looking at?

Siemens is a large global company. I’m with the Siemens Product Lifecycle Management Division; we develop software that supports companies that are developing products and developing manufacturing processes. Siemens Technology to Business, or TTB, is another organization within Siemens, and we’re collaborating together on the Frontier Program.

Siemens Technology To Business focuses on supporting startups and startup technology areas, innovation, and understanding how that innovation relates to Siemens.

Siemens has as long history in manufacturing technologies, in manufacturing automation technologies, and in lots of areas in the field of robotics. We’re looking forward to working with startups, and working with new innovations in robotics, to understand our own technology better, and to understand new technologies that are being developed.

Siemens is sponsoring the 2015 Robot Launch “Industrial Robotics Award”, offering the winners developer licenses for a broad range of Siemens’ product lifecycle management (PLM) software, access to its technology partner program, and other development resources valued at over $150K.

What advantages will startups gain working with Siemens in the Frontier Program?

Startups can really focus on rapid product development that’s enabled by developing on top of the Siemens PLM Software components and platform technologies. The access to the partner ecosystem and the extensive market reach to the installed base of Siemens PLM Software users help them to accelerate the go-to-market.

Through the collaboration with Siemens Technology To Business and Siemens PLM Software, they’ll be able to take advantage of some of the expertise in each of the organizations. Siemens PLM Software has a platform of software technologies that are being made available to the startups through the program, so one of the advantages is access to that technology.

They’ll also be members of the formal Siemens PLM Software Solution Partner Program, so they’ll get the benefit of that program along with the ability to collaborate with other members of that program – people developing technologies at different stages of their company lifecycles.

And they’ll be able to work with Siemens Technology To Business and the startup and innovation programs that Siemens TTB has.

So as well as gaining access to Siemens technology, you’re gaining access to a whole network of business expertise, mentorship and the partnerships that Siemens is developing?

Exactly. Through Siemens TTB there are a great deal of mentorship possibilities, and through the Siemens PLM Solution Program there are hundreds of software and technology partners that are part of the program and available for networking and consultation.

What are some of the companies that have joined Siemens Frontier Program to date?

The initial roll out of the program was in the area of additive manufacturing. Authentise is one example of the kind of company that has joined the program. They are innovating in the area of 3D printing. We’ve had some joint activities with them and have talked about the technologies they’re developing in a fair amount of detail.

Since we began rolling out into the field of robotics, we’ve had a number of interested companies, and one that we’ve already begun working with is Clearpath Robotics. They are looking at the Siemens PLM platform as one of the ways to expand their products.

How do robotics startups go about accessing the Siemens Frontier Program?

There’s an application on the Siemens Technology To Business website. If you go to www.ttb.siemens.com/frontier you can it, as well as a description of the program. You can also find a link to the Frontier Program on the Siemens PLM Partner area.

If you apply you’ll be contacted by people within Siemens so that we can better understand what you’re doing, and your application will be reviewed by a technology team. From there, if your interests align with Siemens’ interests, then we can start working together.

It’s great that Siemens is offering a prize in the Robot Launch competition. What do you think about the startups that have entered?

Of course! We’re looking forward to participating in the competition, and to offering a prize, which is a membership in the Frontier Program. Siemens TTB will be directly involved in looking at all the startups and we’re looking forward to being part of it!

Is there anything you’d like to say in conclusion?

We are excited to work in these new areas, and we are excited to work with the robotics community. We’re looking forward to seeing what new technologies innovative startups have and to sharing the technologies that Siemens PLM Software has.

https://www.plm.automation.siemens.com/en_us/about_us/newsroom/press/press_release.cfm?Component=238716&ComponentTemplate=822

Intel Capital invested $60M in Chinese drone startup Yuneek last month. At this week's InterDrone conference and expo, one can readily see why: lots of interest, lots of people, and products that are becomming commodities.

Intel and Yuneec will work on developing future products. Yuneec makes drones for consumers and industrial users, as well as manned electric aircraft. Intel has also invested in drone companies Airware and PrecisionHawk. These drone relationships fit with Intel’s strategy to make investments in companies developing products with the potential to expand the market for semiconductors, as the company searches for new devices for chips.

Hong Kong-based Yuneek Electric Aviation is one of the Big 3 of drone manufacturers exhibiting at this week's InterDrone International Conference & Exposition in Las Vegas. The other two being SZ DJI Innovations and 3D Robotics. Yuneek and DJI are Chinese companies; 3D Robotics is San Diego based. DJI recently received $75M from Silicon Valley VC Accel Partners. 3D Robotics got $64M so far this year. A study of the 700+ FAA exemptions for commercial drone use shows that the overwhelming majority of them are for companies using DJI quadcopters.

Sixty million dollars for Yuneek, $75M to DJI and $64 to 3D Robotics add up to a lot of money and interest. 

That interest was apparent at the InterDrone event at the Rio Convention Center in Las Vegas. It was the first such event for InterDrone yet from my walk around the show and attendance at a few of the packed conference sessions, it seemed to be successful. 99 exhibitors and over 3,000 visitors. I heard the latter group asking very cogent questions about the ways drones, their capabilities and their data and mapping software could be used for their applications. The crowd appeard to have a high number of foreign visitors as can be seen from the pin-board map at the right.

Another observation from the show was the number of secondary exhibitors: GoPro and GoPro accessories, makers of carrying cases, lenses, sensors, mapping software, retail stores carrying multiple lines of drones, cameras and cases. Samy's Camera, a large West Coast camera and printer provider, was showing off the fact that they've been selling all brands of drones for photographic purposes for years.

BOTTOM LINE: The commercial drone industry is maturing similar to the way industrial robots matured: a few major manufacturers providing their arms (drones) to thousands of integrators, resellers and value-added service providers which extend the sales reach of the drone (robot) manufacturers.

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When Rob Cain replaced John Dulchinos as CEO of Adept Technology in February, 2013 he was charged with restructuring the company to either make it profitable to operate or make it valuable as a take-over. The latter happened today when Japanese OMRON announced plans to acquire Adept for $200 million.

The $200M all cash offer represents a 63% premium over the Adept market capitalization the day before the announcement.

Following the transaction, Rob Cain will continue to lead Adept but will report to the president of Omron Management Center of America, Inc., OMRON’s wholly owned United States subsidiary. An OMRON spokesman said of the transaction, “This acquisition is part of our strategy to enhance our automation technology and position us for long term growth. Robotics will elevate our offering of advanced automation.”

OMRON, a Kyoto-based global component manufacturer, integrator and provider of Delta, gantry and SCARA robots, as well as vision components and systems, employs over 39,000 people in 110 countries and has annual revenues of $7.3 billion, of which $2.7B was from their industrial automation business.

Adept on the other hand recently reported annual sales through June, 2015 of $54 million, as compared to $57.5M in 2014, $47M in 2013 and $66M in 2012. Adept is a US based manufacturer of industrial robots and mobile platforms.

On the news of the sale to OMRON, Adept’s stock rose to $12.93, a few pennies from the OMRON selling price of $13, and a 63% increase over yesterday’s closing price.

If you like this post, you may also enjoy:

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 At last week’s RoboBusiness Conference and Expo in San Jose, there was much gossip, discussion and head scratching regarding the two most recent acquisitions of robot companies: Adept Technologies by Omron and Universal Robots by Teradyne.

Everyone asked why. Many questioned the business sense of the deals. And others asked why there were so many acquisitions compared to other methods of funding like IPOs or equity investments. As can be seen from the following pages of The Robot Report, there has been a significant increase in the number of acquisitions this year.

• June-July fundings, IPOs and acquisitions
• May fundings, acquisitions, IPOs and new funds
• April acquisitions, equity deals and Chinese funds
• March money flow recap
• February was another good month for robotic investments
• January fundings are off to a great start!

Here are the most recent 10 acquisitions:

1. The Adept Technologies sale to Omron Industrial Automation wasn’t a surprise – the company had been on a losing streak and the board had placed a salvage artist as the CEO – but at $200 million, the sale amount was a surprise. The all-cash deal represented a 63% premium over Adept’s stock market capitalization the day before the announcement. OMRON, a Kyoto-based global component manufacturer and robotics integrator employs over 39,000 people in 110 countries and has annual revenues of $7.3B, of which $2.7B was from their industrial automation group. Interestingly, and largely unnoticed, was the acquisition by Omron a few months earlier of Delta Tau, a motion controller component manufacturer, for an undisclosed sum. An OMRON spokesman said of the two acquisitions, “These acquisitions are part of our strategy to enhance our automation technology and position us for long term growth. Robotics will elevate our offerings of advanced automation.”
2. In a surprise move in May, 2015, privately held Danish company Universal Robots – the successful producer of the UR line of collaborative robots – sold to Massachusetts-based Teradyne, a provider of electronic testing equipment for $350 million. Universal has had rapid growth since their startup in 2005. Their first products were sold in 2009, their 2014 sales of $38M were 70% greater than 2013, and they have grown their distributor network to over 200 worldwide. Teradyne, a publicly-traded supplier of test equipment with over 3,900 employees and a product line that doesn’t include anything robotic, has a market value of $4.37B. Teradyne uses robots in their manufacturing process and their customers are good prospects for Universal’s robots. A spokesman said of the transaction, “This acquisition complements our System and Wireless Test businesses while adding a powerful, additional growth platform to Teradyne.”
3. Just the other day it was announced that Fred Moll, the entrepreneur behind Intuitive Surgical, Hansen Medical and Origin Medsystems, received $149.5 million in equity funding for his stealthy startup Auris Surgical Robotics. Auris, founded in 2011, with $184.1M in funding since then, described itself as a venture-funded company developing a robotic microsurgical system designed specifically for opthalmic surgery. The company says they are deep in stealth mode with no comment about the funding or how it will be used.
4. Earlier this year TransEnterix Surgical, a medical devices company, raised $50M from an IPO and market switch. This week TransEnterix acquired the surgical robotics division of SOFAR Spa, an Italian healthcare and pharma company, for $99.8M. The division acquired has spearheaded the TELELAP ALF-X project (Advanced Laparoscopy through Force Reflection) since 2002. SOFAR received $25M in cash and 15.5M shares of TransEnterix stock; the agreement also provides for $31.1M in cash to be paid in 3 waves based on negotiated milestones.
5. Omnicell, a supplier of automation and business analytics software for patient-centric medication and supply management, acquired Florida-based MTS Medication Technologies for $156 million. MTS is developing a pharmacy robot that kits and packages a person’s multi-dose daily pills.
6. A month earlier Omnicell acquired MACH4 Pharma Systems, a German company, for an undisclosed amount . MACH4 provides modular robotic solutions for dispensing medications in original manufacturers’ packages.
7. RobotShop, the Montreal-based online robot and robot parts reseller, acquired Let’s Make Robots, a robot makers and enthusiasts website and community, for an undisclosed amount.
8. Hypertherm, a welding and laser cutting company, acquired Jabez Technologies, a Canadian software provider for an undisclosed amount. Jabez makes Robotmaster CAD/CAM software that integrates off-line programming, simulation and code generation for robots, and delivering quick robot programs.
9. ​DMY Capital, an Australian penny stock company, acquired FastBrick Robotics, an Australian startup that has a new robotic system for laying bricks, for $2.25M plus a bonus of $7M if and when FastBrick is able to brick the walls of a house within 3 days. FastBrick has invented a unique navigation and stabilization system that allows for accurate and fast robotic manipulation over very large areas to within 0.5mm accuracy in all axes regardless of dynamic interferences.
10. Lauren International, a consortium of small manufacturing companies, bought Theiss Aviation, a provider of UAVs to US DoD, NASA and other defense organizations, for an undisclosed amount and renamed it to Theiss UAV Solutions. This is Lauren’s first purchase into robotics. A Lauren spokesman said, “Theiss UAV solutions wants to bridge the gap between people who fly and businesses that need aerial data collection, enabling businesses to use UAV technology and cultivate a healthy relationship with the FAA.”

WHAT DOES IT ALL MEAN?

We appear to be on the rising curve of a robot renaissance: 2015 fundings already double all of 2014 , and the number of acquisitions has also doubled. Robots, robotics and robotic-like apps are entering our lives and workplaces everyday and everywhere, and there is almost continuous media attention.

Looking back at the beginning of the digital era, hobbyists and early adopters dabbled for years but not much happened until three applications showed businesses how PCs and software applications could change the way they worked and make them more productive. As business people became aware of the qualities and uses of WordStar, VisiCalc and dBase, they turned the curve upward exponentially, and even though none of those three companies still exists, their concepts are ubiquitous in our world today.

As robots move out from behind fixed and caged locations to take their place alongside us (as the new collaborative robots are doing, providing assistance or augmenting skills, and as the new surgical systems and low-cost data collecting drones are doing, as they move from sci-fi movies and toys to real-life cognizant and communicating assistants), business people once again can see the tide rising, and they want in (or put another way, they don’t want to be left out). Ray Kurzweil said that auto companies don’t want to be ‘Nokia’d’, i.e., they don’t want to be pushed aside as typewriters were by WordStar, WordPerfect and MS Word, or Nokia’s operating system was by Google’s Android.

Thus companies of all types and sizes are finding strategic reasons to acquire robotic ventures to add to their arsenal of products and services, because they don’t want to be left behind. And they are paying high prices for their acquisitions. Many thought the multiples Teradyne paid for Universal Robots were unreasonably high. Others suggested that the growth Universal has shown – and continues to show – are worth every penny.

To me, I see that acquisitions make sense to and for the acquirer; I’m just disappointed that the acquired company won’t go public so that investors such as myself can share in the fun and ride the wave.

If you liked this article, you may also be interested in:

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• Telcos vs. big data companies: Which sector will drive consumer robotics?

See all the latest robotics news on Robohub, or sign up for our weekly newsletter.

August and September equity fundings, joint ventures, acquisitions and venture funds continue the momentum exhibited throughout 2015 of serious money flowing into robotics startups. For a list of acquisitions, click here.

ROBOTIC VENTURES FUNDINGS:

1. GE Ventures has become a strategic investor in Clearpath Robotics for an undisclosed sum. This follows a March, 2015 $11.5 Series A funding round for Clearpath. GE invested after three years of collaboration on the development of Clearpath’s new OTTO heavy load mobility platform which was displayed last week at RoboBusiness. GE is also the first purchaser of the OTTO.
    

2. Dronomy, an Israili drone technology startup, got $1.5M to continue the development of collision avoidance software. The Dronomy team and it's VC investors have ties to the Israeli air force.
    

3. Intel Capital invested $60M in Hong Kong drone startup Yuneec Electric Aviation last month. Intel and Yuneec will work on developing future products. Yuneec makes drones for consumers and industrial users, as well as manned electric aircraft. Intel has invested in other drone companies such as Airware and PrecisionHawk. These drone relationships fit with Intel’s strategy to make investments in companies developing products with the potential to expand the market for semiconductors, as the company searches for new devices for chips. Qualcomm is doing the same kind of strategic investments for their chip development.
    

4. Virtual Incision, a Nebraska-based startup developing minimally-invasive mini-robot surgical devices for colon resection and other abdominal procedures, received $11.2M in venture funding. The funding will be used for feasibility studies on the use of the company’s surgical technology for colon resection, inflammatory bowel disease and colon cancer.

5. Jibo, Inc., the social robot which last year had the successful $3.7 million Indiegogo crowd funding, recently got an $11M add-on to the previous $25.3M A round to concentrate on the Asian market. With this $11M, Jibo has now raised $38.6M and expects to begin shipping crowdfund and preorders in December, 2015.

6. HUVR Data Services, one of the many new companies using robotic technology to provide that technology as a service to clients, gets $2M in Series A funding. HUVR uses drones to inspect industrial and agricultural assets and provides data analytics to their clients.

7. Peloton Technology, a Silicon Valley startup providing truck platooning technology, got $17 million from some strategic investors after receiving $16M just a few months earlier in April. Denso Intl. was the lead investor in both funding rounds. Denso is a Japanese robot maker that also provides technology and components to the global auto industry.

8. GreyOrange, an India and Singapore-based materials handling startup, received $30 million in equity funding to ramp up production of their Butler shelves-to-picker robot system. GreyOrange currently has 300+ employees which it plans to double with this new funding.

NEW JOINT VENTURES AND FUNDS:

Midea Group, a large Chinese home appliance maker, formed two joint ventures with Yaskawa Electric. Yaskawa is one of the worldwide Big Four manufacturers of industrial robots. Midea and Yaskawa wil invest a total of $65M in two new as-yet unnamed ventures. One will be focused on service robots. Midea will own 60% of this venture. The other will focus on industrial robots and Yaskawa will own 51%. Both new ventures will be based in Guangdong, China and will be responsible for research, manufacturing and marketing. 

Midea hopes its expansion into the robot industry will help upgrade its own manufacturing and industrial automation. It also hopes that Yaskawa’s technologies and products in service robots will help Midea find new business opportunities as China addresses the economic impact of a huge aging population in the coming years.

GE Ventures, which has been activly investing in robotics startups (including the one to Clearpath Robotics described above), created a new $20M fund with Carnegie Mellon University's (CMU) National Robotics Engineering Center. The new fund, The Robotics Hub AKA Coal Hill Ventures, will begin writing checks early in 2016 for anywhere between $200,000 and $2 million for 20 to 30 emerging robotics startup companies that will be part of The Robotics Hub.

The strategy that’s most important to GE is to really get behind startups and help them scale. A lot of companies can come with the money, but what we bring is the ability to scale and the opportunity to commercialize quite quickly.

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At a press event to launch the IFR’s World Robotics Industrial Robots statistical review of 2014 (with projections through 2018), the $1,350 report forecasts a 15% CAGR, thereby doubling the annual number of units sold to around 400,000 by 2018.

70% of those sales will be to users in China, Japan, the U.S., South Korea and Germany. China purchased 56% more robots in 2014 than 2013, of which approximately 17,000 were made by Chinese vendors. The IFR is forecasting Asian robot sales units to increase from about 140,000 to 275,000 by 2018, by far the largest and fastest growing marketplace in the world. They are projecting 15% CAGR worldwide, but as the chart shows, much lower growth than that for Asia and China in particular.

Specifically, sales for the global robotics industry in 2014 were $10.7 billion, a 13% increase over 2013. There are now about 1.5 million robots at work globally, an increase of 11% over 2013. Adding supporting services such as integration, accessories, peripherals, software and systems engineering at a 3X multiplier, worldwide 2014 sales are estimated to be $32 billion.

The report suggests that rapid automation in China and global competition of industrial production are the main drivers for the sustained growth forecasts. Further reasons for the increased demand for robots include:

• the continuing strong auto industry
• manufacturing of electronics is also cranking out ever-higher volumes
• energy-efficiency and new materials are replacing older robots
• the reduction in the length of time manufacturing lines stay up as product varieties increase and life cycles decrease is causing increased retooling and upgrading of automation equipment.

Robots in Depth is a new video series featuring interviews with researchers, entrepreneurs, VC investors, and policy makers in robotics, hosted by Per Sjöborg. In this interview, Per talks to Melonee Wise, lifelong robot builder and developer, and CEO of Fetch Robotics.

Melonee shares how she first got into building things at a young age and how that led to studying mechanical engineering and leaving her PhD project behind to become the second employee of Willow Garage. She shares some personal anecdotes from the first few years at Willow Garage, including both successes like the PR2 and some less successful moments.

Melonee also gives her perspective on the development phase robotics is in now and what the remaining challenges are. Related to that, she discusses what is feasible to deliver in the next five years vs. what her dream robot would be.

You can support Robots in Depth on Patreon. Check out all the Robots in Depth videos here.

The varied world of robotics appears to be in favor with venture capitalists.  CyPhy Works just got $22 million to scale up building UAVs for the consumer market, and Righthand Robotics got $3.3M to enable development of their smart robotic order-picking system.

CyPhy Works, with this $22M “B” round of funding, added three new strategic partners: UPS Strategic Enterprise Fund, Motorola Solutions Venture Capital and VC Bessemer Venture Partners. CyPhy Works got its start as a drone maker by building technology to inspect bridges, dams and other infrastructure facilities. Its tether technology enabled it to stay aloft indefinitely, stream what it sees in high definition, and have its communications be secure and unjammable. These capabilities make their drones valuable to defense, security, police, fire fighers and search operators as well.

Recently, in a Kickstarter campaign that raised almost $900,000, CyPhy added a new trick to its arsenal of unique technologies: level and smooth flight without the use of gimbaling devices (it has to do with using six rotors instead of four). It is this latter product that is being readied for the consumer market with some of the funding in this “B” round.

CyPhy has raised $35.35M since launching in 2010.

RightHand Robotics received $3.3M in funding from unknown sources to continue development of its low-cost automatic grasping technology for use with material handling and bin picking. RightHand’s technology doesn’t require per-object programming or setup; rather, with flexible grasping and fingertip barometric and tactile sensors, items can be grasped by “feel”.

RightHand’s rubber-jointed fingers bend to match the shape of objects, gripping them without software controls. The hand can also move into different configurations, depending on the size and shape of the object being grasped. Robotic arms fitted with RightHand’s compliant hand can grasp a wide variety of items from shelves, bins, or cases, and the company is pursuing studies in e-commerce order fulfillment, flexible manufacturing and other material handling marketplaces.

We have reported 37 equity fundings and 25 acquisitions so far this year. It’s not just the car companies searching for talent and innovation in their new Silicon Valley centers. Israel, Russia, China and big companies like Bosch, SoftBank, Apple and Google are all investing in robotics for various strategic reasons.

Many new robotics companies have been acquired this year and even more have been funded. Drone makers 3D Robotics, DJI Innovations and Yuneec Aviation all received massive amounts of equity funding ($50M, $75M and $60M respectively). But even more money was invested by acquisitions. Adept Technologies was acquired by Japanese OMRON Industrial Automation for $200M, Universal Robots by Teradyne for $350M, VGo by Vecna for an undisclosed amount, Segway by Chinese Ninebot and gomTec by ABB. The rationale behind each purchase was strategic as was the $600M joint venture supporting the roll-out of the Pepper robot in Japan and China by SoftBank, Alibaba and Foxconn.

Additionally, three R&D ventures stand out as particularly far-reaching and interesting:

A new Sino-Israeli Robotics Institute is being developed as the centerpiece of a $2bn industrial park in the Guangzhou region of China. It will house entities built around the technology developed jointly by Israeli and Chinese researchers at the new institute. “China is a major opportunity for us, and manufacturers there are very motivated to take advantage of our technology. There are many factories that will be interested in the technology developed at the Institute” said Zvi Shiller, chairman of the Israel Robotics Association.

Earlier this year there was another Chinese joint venture with the Russians. The Skolkovo Foundation and Chinese Cybernaut Investment Group inked a deal to establish an R&D business incubator at the Skolkovo Innovation Center in the outskirts of Moscow, with at least 15 startups in IT and robotics, space, energy-efficiency tech and new materials, which will be developed and marketed with China.

Bosch, the Germany-headquartered global conglomerate, began moving into their new $350M research center outside of Stuttgart. The Bosch Group employs 360,000 people worldwide and generated sales of $55.6bn in 2014 from four business sectors: Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology. The new facility consists of 14 multi-story buildings, 11 labs and workshop buildings and two service buildings. The new center (Bosch also has a Research and Technology Center in Palo Alto, California), in Renningen, is near Mercedes and BMW and will house about 1,700 creative minds doing applied industrial research.* “Like a university, our new campus brings together many faculties. Here, we want our researchers to do more than just think about what the future could bring. We want them to be successful entrepreneurs as well. Renningen (and this new campus) is Bosch’s own Stanford and an expression of our faith in Germany as a technology location,” said Dr. Volkmar Denner, chairman of the Bosch board of management.

_____

* I visited two Bosch startups in the Renningen area last year as their new campus was under construction. Wholly-owned by Bosch entrepreneurial startups dotted the office landscape all over the area. The new campus, and Bosch’s encouragement of interdisciplinary collaboration, is sorely needed and shows the company’s goal of staying one step ahead of technological breakthroughs, while adding some of the benefits of a unique community environment.

Robots in Depth is a new video series featuring interviews with researchers, entrepreneurs, VC investors, and policy makers in robotics, hosted by Per Sjöborg. In this interview, Valery Komissarova — Business Development Director at Grishin Robotics — talks about her work at an investment company focused on consumer robotics.

Komissarova describes why the timing for starting Grishin Robotics was just right, and shares some of the initial feedback from different parts of the robotics community.

She also talks about differences between the companies that get funded and the ones that that don’t, what it takes to be a successful entrepreneur in robotics, and the areas within consumer robotics where we are likely to see strong development in the next few years.

You can support Robots in Depth on Patreon. Check out all the Robots in Depth videos here.

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• Robots Podcast#116: Grishin Robotics
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See all the latest robotics news on Robohub, or sign up for our weekly newsletter.

As surgeons develop and use ever-more capable robotic augmentation devices for their surgical procedures, many startup companies are being acquired by global medical device conglomerates. Stryker's $1.65 billion acquisition of MAKO Surgical in September, 2013 is an example.

Smith & Nephew, a global medical tech conglomerate that is expanding into robotics-assisted surgeries, announced that they are paying $275 million to acquire Pittsburgh startup Blue Belt Technologies. Blue Belt has developed a robotic-assisted surgical system for knee replacement. Smith & Nephew is already Blue Belt's sales partner and distributor. 

Blue Belt has been working on, and plans to launch in 2017, a total knee system, and has hip arthroplasty in its pipeline.

Olivier Bohuon, Chief Executive Officer of Smith & Nephew said, “This acquisition is a compelling strategic move, with the combination of complementary products and R&D programs creating a platform from which we can shape this exciting new area of surgery. It reinforces our distinctive orthopaedic reconstruction strategy, which combines cutting edge innovation, disruptive business models and a strong emerging markets platform to drive outperformance.”

The surgical robot device market was estimated to be $3.2 billion in 2014 and forecast to reach $20 billion by 2021 as next generation devices, systems and instruments are introduced to manage surgery through small ports in the body instead of large open wounds. The market is characterized by enormous variety and innovation from snake robots to navigation systems to highly articulated devices such as the da Vinci surgical system from Intuitive Surgical. This dynamic growth industry will involve many shifts in ownership and funding, suggests RNR Market Research in their 553 page, $4,000 report published in April.

In addition to Stryker's $1.5 billion acquisition of MAKO, many other robotic medical device startups have been acquired including Hansen Medical which acquired the rights to Advanced Cardiac Therapeutics and also acquired EndoVia Medical and AorTx; Intuitive Surgical acquired licenses from Power Medical Interventions; Auris Surgical Robotics was just acquired for $150 million; and TransEnterix Surgical acquired the TELELAP ALF-X project for $100 million.

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No wonder rents are so high in Silicon Valley. Companies from around the world are setting up research facilities and grabbing talent from the area.  The most recent announcements are that Chinese drone maker DJI and Japanese car maker Toyota are creating large R&D centers in the area.

SZ DJI Innovations, the Shenzhen, China-based tech giant with the line of successful drones, will open a new 12,000 sq ft R&D center in Palo Alto and plans to hire up to 75 engineers. The center marks DJI's first major effort to take advantage of American engineering talent. DJI currently has around 100 employees in the U.S., but up until now they have mostly focused on customer support, marketing and business development. DJI received $75 million in funding in May from Palo Alto-based Accel Partners to help it expand globally.

In an update to Toyota's September announcement of an alliance with the AI labs at MIT and Stanford to develop auto-related sensing and perception, navigation and human-centric learning systems, automated decision making, and human-machine interaction technologies from a new facility in Silicon Valley, Toyota elaborated on their plans. Toyota will invest $1 billion over five years for their new 200-person Silicon Valley facility near Stanford University and a second R&D facility near the MIT campus in Cambridge. The two new labs will be part of Toyota Research Institute and be headed by Gil Pratt who recently headed the DARPA Robotics Challenge. Toyota said that, in addition to autonomous driving, they plan to develop AI "technologies for everyday use, delivering a safer lifestyle overall." “This is the first small step that allows us to go beyond automobiles and make use of the Toyota group’s potential by utilizing artificial intelligence,” Toyota President Akio Toyoda.

Quoting from a NY Times article on Toyota's plans: 

International corporations like General Electric; Baidu, the Chinese search engine; Samsung, the South Korean conglomerate; and all the major automakers have been establishing research outposts in or near the region [Silicon Valley] to take advantage of its engineering talent... Artificial intelligence technologies were disappointing for decades, but they have finally begun paying off, leading to systems such as Siri, the personal assistant from Apple, and rapid improvements in self-driving vehicle technology. And in recent years, there has been a rush to recruit talented researchers in so-called machine learning, many of them produced by Stanford and the nearby University of California, Berkeley. Toyota plans to hire 200 scientists for its new research center.

In another announcement last week from the University of CA San Diego, a new Contextual Robotics Institute was unveiled with major  support from Qualcomm and Northrop Grumman. The new institute is aimed at developing machines that can interpret such things as facial expressions and walking styles and size up people's thoughts, actions and feelings.

"Our plan is to do the research and development that are needed to realize robots of the future — robots that are safe, useful and autonomous in any environment," said Albert Pisano, dean of UC San Diego's Jacobs School of Engineering. "That means pulling together our engineers and our social scientists to focus on both the robots themselves and how people will interact with them."

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A new 300-page research report from Bank of America Merrill Lynch, Robot Revolution – Global Robot & AI Primer, and to a lesser extent BSG’s report: Man and Machine in Industry 4.0, make for interesting reading and highlight the role of AI and the changing nature of jobs and work in the exponential growth of the robotics industry.

“We are facing a paradigm shift which will change the way we live and work,” the authors of the BoAML report said. “The pace of disruptive technological innovation has gone from linear to parabolic in recent years. Penetration of robots and artificial intelligence has hit every industry sector, and has become an integral part of our daily lives.”

FORECASTS:

The BoAML report projects that the total global market for robots and artificial intelligence will reach $152.7bn by 2020, and estimates that the adoption of these technologies could improve productivity by 30% in some industries.

This “revolution” could leave up to 35% of all workers in the UK, and 47% of those in the US, at risk of being displaced by technology over the next 20 years, according to an Oxford University study cited in the BoA ML report.

Robot & AI-related technologies, services, and solutions are core to the business projections in the BoAML report which also sees fast growth in the following areas:

• Warehouse logistics is likely to be a major growth area, where robots can be used to move merchandise from shelves to packing and shipping areas. Advances in pattern recognition and dexterity could eventually also allow warehouse robots to load and pack items for shipment.
• Mining activity is becoming increasingly automated along the entire supply chain, from robotic drilling to autonomous haulage and loading.
• Elder care services are also well-suited to increased robotics penetration given rising global dependency ratios and repetitive, round-the-clock demands. Such robots are already being used to lift elderly people in nursing homes and hospitals. They include exoskeletons that can be worn by seniors to help with movement or by individual caregivers to assist in lifting. In 2013, Japan initiated a program to pay two-thirds of the expenses associated with developing low-cost robots for elder care and specified the need to improve social welfare delivery in order to prevent workers from leaving the labor force to support elderly relatives at home.
• Telemedicine is another growing source of robotics demand, with the Food and Drug Administration clearing the first remote presence robot for use in hospitals in 2013. The robot can be controlled remotely or map Its own path on the hospital floor, allowing real-time communication between off-site physicians and on-site patients via a mounted video display, camera, microphone and speakers.
• In agriculture, automation is already being widely practiced in milking and increasingly in precision techniques that use sensors and drone-mounted cameras to monitor soil for temperature, moisture and nutrient content. A significant portion of fruit and vegetable harvesting is still performed manually, but new mechanical techniques are emerging on the back of improvements in robotic vision and dexterity.

MEDIA SPIN:

A personal pet peeve: hyper headlines about the reports:

• The Wall Street Journal: Merrill Lynch Warns of Robot Apocalypse
• MarketWatch: These are the stocks to watch as robots take over the world
• BloombergBusiness: Bank of America Picks 10 Key Stocks to Watch as Robots Take Over the World
• Business Insider: Almost half of all US workers are at risk of losing their jobs to robots
• Forbes: Killer cars and robotic teddy bears
• Daily Express (UK): Fears of killer robots increase as machine revolution now firmly underway

9 KEY STOCKS TO WATCH:

Among more than 200 companies Bank of America identified as set to benefit from the rise in robotics, health-care and industrial automation are currently the only industries with particularly high exposure. Here is their list:

1. Intuitive Surgical Inc.
2. ABB Ltd.
3. Fanuc Corp.
4. Mitsubishi Electric Corp
5. Yaskawa Electric Corp
6. Nabtesco Corp
7. Omron Corp.
8. Rockwell Automation Inc.
9. Shenzhen Inovance Technology Co. Ltd.

An alternative source of key robotics-related stocks and thematic robotics and AI industry information is Robo Global which has compiled and sifted through over 1,000 publicly-traded global companies to produce their U.S. and EU indexes: ROBO Global Robotics & Automation ETF (US) and ROBO Global Robotics & Automation GO UCITS ETF (Europe).

INTERESTING CHARTS:

If you liked this article, you may also be interested in:

• Study shows public perception of robotics generally positive in EU, but declining
• ‘Robots or jobs’ is key focus of #ERF2015
• Summer robot reading: Fact, fiction and debatable
• Artificial intelligence is a tool, not a threat

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Robots are starting to move out of the factory and into more common use as a service industry, where they work alongside people in places that range from the warehouse to the supermarket. Along the way, we need to ask: How do we integrate robotics into society? And what roles can robots play? A new report released today by Silicon Valley Robotics and titled “Service Robotics Case Studies in Silicon Valley – November 2015” showcases the new ways in which robots can enrich our economy, creating new positions in the retail, logistics, health and hospitality industries.

The service robotics industry is at such an early stage, and there is huge value in collecting the stories of leading edge robotics startups that are developing technology and business models that have never been real-world tested before. This case study tracks companies like Savioke (which provides a delivery robot for hotels and is working on eldercare opportunities), Adept (which provides a general-purpose mobile base that can be used in many settings, including one application as a restaurant server), Fetch Robotics (which provides mobile robots and mobile manipulators for e-commerce warehouse facilities), and Fellow Robots (which provides mobile retail assistants for hardware stores).

“The lessons learned from these companies will help steer a new generation of robotics companies as they navigate the difficult passage from startup to service robotics. It is still early, but look to Silicon Valley to set the pace for that future,” says Rich Mahoney, President of Silicon Valley Robotics and Director of Robotics at SRI International.

The report also includes some analysis of funding and trends in service robotics. The service robotics sector is currently worth US $3.7B according to the International Federation of Robotics (IFR), and although that is only 1/10th of the size of the industrial robotics sector (US $32B), the service robotics industry is demonstrating very high growth rates. Mobile platforms showed 150% increase in sales in 2014, and assistive technology showed a 650% increase. Some areas are so new that statistics are only just being recorded, as is the case for kiosk robots and retail assistants.

Report contributors Ekta Sahasi and Greg Lok (respectively, Vice President and Business Strategy Lead at Konica Minolta Business Innovation Center), found that investment into robotics is increasing, up 36% to US $341.3 million in 2014. This is in parallel with the overall rise of VC hardware investment, which has increased 30 times between 2010 and 2014.

Roger Chen, Principal at O’Reilly AlphaTech Ventures (which has invested in startups like Fetch Robotics, 3D Robotics, Planet Labs, LittleBits, Misfit Wearables and Sight Machines), says they are looking ahead and investing before market categories emerge. Chen says that there has been a confluence of technological factors enabling new forms of robotics suitable for the service industry. At the same time, there is growing market pull from the ‘on demand’ economy.

“Take a look at e-commerce and what’s happening with consumers. They want things faster, cheaper and personalized, and this just creates so much pressure on manufacturing, supply chain and logistics companies.” says Chen.

The nascent service robotics industry can also learn from the history of enterprise computing, says Michael Harries, Chief Technologist of the Citrix Startup Accelerator, which is keeping a close eye on the fields of AI, machine learning, IoT and robotics.

“Cloud computing, Software-as-a-Service, and mobile connectivity represent an important competitive opportunity for every robotics-focused company, and the future of the service robotics industry is inevitably one of Robotics-as-a-Service,” says Harries.

Marco Mascorro, CEO of Fellow Robots — the company that makes the retail assistant robot at Orchard Supply Hardware Stores — notes that, “The idea is to rethink how retail
 is done in terms of customer service and the experience you actually have when you go and purchase items in a store. We want to help businesses make the process as smooth as possible, so that their customers find everything they need, everything they’re looking for, and have a great experience. That scenario is a win/win for both the retailer and the customer.”

“Service Robotics Case Studies in Silicon Valley – November 2015” can be downloaded from the Silicon Valley Robotics website (svrobo.org). See also the recent White Paper from the Association for Advancing Automation (A3) titled “Robots Fuel the Next Wave of U.S. Productivity and Job Growth”.