What is one to make of this focus series … Big Deals: What It Means to Have the Giants Investing in Robotics … with the giants being Google, Amazon and Apple (as given in the preamble)? The assumption, of course, is that robotics investments by these companies represent a turning point in the evolution of robotics — perhaps something wholly different, outside the normal ebb and flow of robotics investments, acquisitions, and mergers. It is also assumed that the investments represent some type of trend, or at least have something in common.
When you’re shopping for the best online deals you’re probably not thinking much about the massive distribution network required to bring that pair of shoes to your doorstep. Is your quest for the best possible deal helping to usher in the next wave of automation?
Internet giants like Amazon and Google have an obligation to stay competitive and are going head-to-head over the online shopping space.
Whilst the word ‘robot’ generally conjures up visions of humanoids with superior intelligence, this science fiction image tends to forget the other type of robots: machines that carry out complicated motions and tasks, such as automated software processes1, industrial robots, unmanned vehicles (driverless cars, drones) or even prosthetics. And it is principally the programmable machine robots that are among the robotic advances being acquired by major companies across the globe2. These are also the robotic technologies that are disrupting commercial production and employment, and will likely continue to do so over the remainder of this decade.
Recent eye-popping acquisitions of robotics technology companies by giants like Google and Amazon might suggest that the automated age is upon us. Is it? Why now? Are these the companies that will usher in the commercial robotics and drone era? And will the little guy continue to find a place in the new epoch? While the excitement surrounding all of this suggests that a huge movement is afoot, those in the community should be relieved that we are finally seeing any activity.
If the world outside the robotics community didn’t know about Boston Dynamics, Kiva and Nest, they do now. Recent robotics acquisitions and investments by major-league players like Google, Apple and Amazon have generated a blitz of headlines in the robotics world and beyond. Are we witnessing a power play in the making? What does it mean for the future of robotics? And is all the hype beneficial or harmful to the robotics community?
This month’s Robotics by Invitation will serve as a launch for Robohub’s newest focus series on how big time corporate attention effects the culture of robotics. In the coming weeks we will be bringing you insight from the likes of Steve Cousins, Dan Kara, Valery Komissarova, Avner Levin, Chad Partridge, Gill Pratt, Erin Rapacki, Frank Tobe, and Rob Wilson.
Judging by the levels of media coverage and frenzied speculation that has followed each acquisition, the short answer to what does it mean is: endless press exposure. I almost wrote ‘priceless exposure’ but then these are companies with very deep pockets; nevertheless the advertising value equivalent must be very high indeed. The coverage really illustrates the fact that these companies have achieved celebrity status.
Google, is the wild card for me. With more acquisitions (DeepMind, Boston Dynamics, Redwood Robotics, Industrial Perception, Meka, Schaft, and others) than Apple, Amazon, Facebook, and Microsoft combined, the GOOG looks to be rigging up a kit that would offer excellent image recognition + navigation + mobility.
They want to communicate more accurately, resolve issues faster and with higher levels of satisfaction than at present. They also want to enable more complex communication. And they want to do it amiably.
There is serious momentum in robotics these days, evidenced by recent news from Apple, Amazon and Google:
What does it all mean?
Given all the chatter on drones and automation, we thought it would be a good time to dive deeper into the Kiva opportunity and potential impact on leverage/margins. For the sake of our analysis, we take a look at what the Kiva margin impact could be if Kiva automation were to be integrated across all of AMZN’s NA fulfillment operations. In short, we estimate that Kiva could drive fulfillment cost savings in the $450-900M range or be 60-120 bps accretive to CSOI margin in NA alone – underscoring a bigger global opportunity.
On Sunday, Charlie Rose from CBS News 60 Minutes, interviewed Jeff Bezos about what is next for Amazon, the world’s largest online retailer with more than 225 million customers.
Volume can reach 300 items a second on special sales days and that volume feeds the activities at 96 Amazon warehouse/distribution centers around the world. Amazon’s goal is to sell everything to everyone and their warehousing and shipping methods have been of constant interest because of their success at being able to deliver as promised. For robotics-interested people, Amazon acquired Kiva Systems and their robotic shelf-to-picker system for $750 million two years ago. Interestingly, in this 60 Minutes interview, no mention was made of Kiva or that method of pick and pack. [Why was that?]