Eight inches of new-fallen snow covers my driveway. As the final flakes drop, I ponder how and when I will address the situation. Suddenly, there is a knock at my front door. I open it and a man with a snow shovel says, “Hello. I will shovel your driveway for $40 if that offer pleases you.” Well, it does. I agree to the terms and he begins the task. When he finishes, I gladly pay him the amount he proposed. Putting the money in his pocket he then says, “For another $40 I will come into your house and dance while playing my accordion.” I try to present a polite expression as I answer, “I’m sorry…it’s nothing against you or accordions, it’s just that it’s not worth it to me.” He looks towards the ground pensively and nods. Then he turns to me and says somewhat contemplatively, “This is really how things are with service robotics, right?”
My eyes widen, “Yes!”, I respond. “You’re exactly right!”
Then I suddenly awake from the dream. Somewhat disoriented. Enlightened. A little hungry…
In order to maintain the content on my website, The Robot Database, I follow the news on robotics daily. There seems to be consensus on the prediction that the market for service robotics is poised for tremendous growth over the foreseeable future. The term “service robotics” is a catch-all category involving robots other than the manipulator arms and similar structures that weld, paint, palletize, build circuit boards, etc. This latter group of machines is referred to as “industrial robots”. I expect the definition of service robots to evolve and be refined over time. Right now the category is being subclassed somewhat informally into field robotics, healthcare robotics, consumer robotics, etc. I wouldn’t be surprised if the term “service robots” becomes somewhat meaningless in the not-too-distant future due to the scope of applications it eventually covers.
Robotics is not a fad market. Consumers and businesses will eternally be attracted to the promise that robots deliver. They afford us more quality time by performing work we don’t want to do. They save corporations money by automating manual labor, often more effectively. But
in order to fulfill the optimistic projections in growth, service robots must match market demands in capability and price. I see value of service robots described in three levels: utility value, niche value, and novelty value.
The robots that succeed in providing utility value have the widest market and will be appropriately priced. This market includes products like robot vacuum cleaners and personal assistants or home automators. Companies like iRobot had a good year in 2016 as more people are sold on the value of robot vacuum cleaners. As far as personal assistants and home automation, I’m pretty sure I placed my order for an Amazon Echo the day I found out about it. I was working on a software application that would help me manage my calendar and to-do list and could perform tasks like reporting the weather. When I saw a product that could provide these services being sold for under $200 the value proposition was very compelling to me. I haven’t bought a robot vacuum cleaner yet but that is mostly due to the fact that my house is too cluttered for the robot to be reasonably effective. There are robots that will be very interesting to watch. One such robot is a lawn maintenance and snow removal machine from the Kobi Company priced at around $4000. Another is a laundry-focused robots such as Laundroid and FoldiMate.
Robots that provide niche value have a smaller market but will be typically priced much higher due to the specialized capability they provide. These robots are often in markets that offer high-priced services to their end customers. Robot surgical systems are a good example of this category. These devices can cost several million dollars and incur ongoing service contracts on top of that. But the success of the incumbent companies in this space and the emergence of new competitors validates the market. There are at least two companies creating bricklaying robots. Fastbrick Robotics recently put a $2million price tag on its flagship robot. These robots are not as mature in the market as their surgical counterparts. That being said, if they prove capable, they will disrupt the industry. At the time of this writing, Fastbrick Robotics is trading around $0.10 a share (#wishICouldInvestOnTheAustralianExchange…). Other robots that may provide niche value include mobile security robots, germ-zapping robots, and the impressive humanoids and quadrupeds from companies like Boston Dynamics that haven’t yet seemed to find a reasonable market outside of research.
Some robots are intended for novelty value. Cozmo, the intelligent little truck from Anki sold very successfully in the 2016 holiday season for about $180. I saw some videos and read reports on Cozmo and it sounded really neato. Now I am not ready to spend $180 on “neato” but it’s clear that other people are. The robots that provide novelty value will require a market with enough disposable income to get past the price tag. So that “purchase threshold” will be driven by how much novelty the robot provides and how expensive it is. I mentioned that some robots are intended to provide novelty value. Some robots that are intended for utility value or niche value may have to settle for novelty value if they can’t provide the appropriate capability for the cost. Interesting examples of robots that currently straddle the niche/novelty divide are the humanoid robots from Alderbaran and Softbank such as Nao and Pepper. The price of these robots runs into the thousands of dollars but they cannot perform any type of labor that a human can. Don’t get me wrong…if somebody handed me a Nao robot and said, “It’s all yours…no strings attached…”, I would be incredibly happy and would probably be up all night just trying to make it do silly things like dance and play the accordion. But due to their sticker price I can’t justify a purchase because, for my needs, it just isn’t worth it. However, these robots are being applied to niche applications including concierge services, education, and even to help children with autism. Most of these applications are experimental so I believe it’s fair to say that the question of “niche or novelty” is still open.
Some closing thoughts on service robots and their value… Recently my seven-year-old son asked me if I could play a game with him and I explained I had to first finish washing the dishes. A bit disappointed, he asked me if there was a robot that could do all the housework and how much would it cost? His question caused me to ask myself: how much would I pay for a robot that could do all my chores effectively? After considering it for a bit I arrived at the qualitative answer: a lot. Seriously, a whole lot of money. I’m talking about “nice car” kind of money. Things aren’t very different for robots than they are for any sellable product. The market is just not well-tested for many of these revolutionary machines so the companies making them may not have a good idea of the marketable price. In order to successfully sell their robot products, these companies will need to understand the capabilities and level of value they offer, and price them appropriately. Like many people that are interested in these developments, I’m betting on the eventual ubiquity of service robots. It will be interesting to see just how and when the events occur.