Rise of Consumer Robots: Google?s Driverless Car and iRobot
Alvin is a member of The Motley Fool Blog Network -- entries represent the personal opinions of our bloggers and are not formally edited.
The potential of robotics is immense. Robots can be mass produced, operate in environments too harsh for humans, and complete repetitive tasks quickly and accurately. Robots have already become common in industries where they perform tasks such as welding, assembly, disassembly, and processing. According to a research report by MarketsandMarkets, the global industrial robotics market is expected to grow to $32.8 billion by 2017.
In addition to the industrial robotics market, robots are edging into the consumer market. The potential of consumer robotics is huge. With a global population of around 7 billion people, companies that build the right consumer robot will make a ton of money. iRobot
There are many impressive robots that have been or are currently being developed. Two examples are ASIMO and TOPIO. ASIMO and TOPIO, designed by Honda Motor
While there are many companies and research labs all working on amazing consumer robots, the best investments, currently, are tech giant Google
The potential of the technology to make driving safer is huge. The computer driver reacts faster than a human driver, has 360 degrees field of view, does not get tired, does not get distracted, and does not get intoxicated. As of August, Google?s driverless cars have driven a total of 300,000 autonomous accident-free miles.
The closest competitors to Google are probably Ford Motor (NYSE: F)
On the other hand, iRobot has been quietly growing with its home cleaning robots. The company has several home robots currently in the market. Its most famous home robot is the Roomba, which provides autonomous vacuuming. iRobot?s other robots Scooba, Verro, and Looj provide autonomous floor washing, pool cleaning, and gutter cleaning, respectively. The following table sums up iRobot?s business.
As shown, iRobot?s home robot division accounts for over half of the company?s revenue. The rest of the company?s revenue comes from US government contracts. Besides 2009, when the global economy went into deep recession, iRobot?s shipments of home robots have been steadily climbing. In the foreseeable future, this growth will likely continue because the market is new and iRobot has a head start and a stronger brand name than its competitors. In addition, the robots save people time. Why waste time vacuuming when a robot can do it? iRobot does have competitors such as Evolution Robotics and Neato, but the market has so many potential customers that competition is not a big problem at the moment. Also, iRobot has the option to expand its current designs and add functionalities beyond cleaning.
In summary, iRobot and Google are a good investment combination into the consumer robotics market. Google has a revolutionary technology and iRobot is a leader with a strong growing foothold. While Google?s driverless car is not yet ready, Google?s current business is strong enough to get the project into the market. In addition, Google?s large amounts of capital, strong background in programming, and large data processing centers give the company a huge advantage over its competitors. Finally, even if Google?s driverless car fails, Google?s core business of internet search is a good business to fall back into.
On the other hand, iRobot has robots that are already in the market. The robots are practical and help people maintain their homes. In a recent press release, iRobot stated that it has sold more than 8 million home robots worldwide. Basically, the company is in good position to ride the growth of consumer robots. Although the market for consumer robotics is still developing, it is in similar position to where the PC was during the 1980s. It should not be ignored. Investors who want to profit from this emerging market should go with a market leader and a company with a game changing technology. iRobot and Google are the way to go.
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