The Only Two Robots Humans Should Be Afraid Of
In last Saturday’s column, I profiled the fast-growing robotics industry and showed how Bill Gates and Microsoft (MSFT), plus other tech heavyweights like Google (GOOG), Apple (AAPL) and Amazon (AMZN), are lining up for a piece of the action.
As technology advances, the industry has become compelling for retail investors, too.
However, it’s one thing to know what areas make for strong investments… but it’s another thing entirely to know exactly where to invest your money.
That’s why I’m here.
And let me assure you… the robotics market is straightforward to navigate, once you know where to look.
So let’s get to it by outlining the only two robotics sub-sectors that you need to concern yourself with over the next decade – and some of the major players within them…
Since they were introduced in the 1960s, industrial robots have become a staple of factory automation.
But robots are selfish beasts.
Due to their unmatched efficiency, sophistication and strength, industrial bots have taken millions of manufacturing jobs away from human employees.
What’s more, with robotic technology advancing at a rapid rate, we’re faced with two inescapable realities…
- In the not-so-distant future, lower-income manufacturing jobs will become nonexistent for humans.
- Some lucrative opportunities for investors.
En Route to a $37-Billion Market
According to leading industry forecaster, Research and Markets, revenue for the global industrial robotics market is expected to cross $37 billion by 2018. That’s not surprising when you consider the overwhelming amount of manufacturing tasks that industrial robots can perform across just about every sector.
Historically, robotics’ biggest clients have been electronics and semiconductor manufacturers. But the tide is shifting – with stronger demand coming from the auto industry.
And “demand” is the key word when it comes to industrial robotics…
More specifically, we need to follow the demand stream.
The “Global Industrial Robotics Market Forecast” anticipates that over the next five years, the bulk of the demand for industrial robots will come from China, closely followed by the United States, Japan, South Korea and Germany.
But as emerging markets continue to grow, countries like Brazil, India, Russia and Indonesia are emerging as new manufacturing hubs. So their demand will rise, too.
Companies set to benefit most include leading players in the global industrial robotics market – ABB Limited (ABB), Kuka AG (KU2: Germany), Kawasaki Heavy Industries (KWHIY), Fanuc Corporation (FANUY) and Seiko Epson Corp (SEKEY).
Professional service robots are high-tech, sophisticated, highly valuable and increasingly used in factories, hospitals, public buildings, hazardous environments, oceans, outer space, and farms.
While the evolution of the professional service robotics industry began back in late 1900s, it’s only in the past two decades that we’ve seen the area really take off. Why?
Well, it’s down to huge technological advances and equally huge demand from major sectors like defense, healthcare (in response to the growing elderly population) and mobile technology.
Expanding government grants and funding, along with a surge in venture capital investments, certainly hasn’t hurt, either!
More importantly, though, as I mentioned in my last column, industry giants like Google are scooping up robotic companies left and right. (And keep in mind, some of these global behemoths have more money than some entire governments!)
Although Google hasn’t said much about what it plans to do with its growing army of robots, the smart money says that the company intends to use them to expand its driverless car ambitions.
Some robots within the professional services category (notably defense-related ones) have been mainstays for some time, while others – like “tele-presence” robots in the healthcare industry – are fairly new.
It’s for the reasons I’ve outlined above that the service robotics industry is projected to become a $46.1 billion industry by 2017, according to Markets and Markets.
The leading players here include Intuitive Surgical (ISRG), AeroVironment (AVAV), Accuray (ARAY), AB Electrolux (ELUXY), Yaskawa Electric (YASKY) GeckoSystems (GOSY), and Yujin Robot (056080: South Korea).
The Bottom Line
Of course, if you’re looking to get a piece of the entire robotics industry, your best bet is to use ETFs.
In the past, that was easier said than done with robotics. However, in October 2013, the Robo-Stox Global Robotics & Automation ETF (ROBO) launched. The ETF has 85 holdings and allocates 85.7% of its assets to American, Japanese, Chinese, and European robotics companies.
Now, any of the companies I mentioned above – along with ROBO – would put you in position to take advantage of a rapidly growing robotics market.
However, there’s one company that’s better than them all. And it’s a perfect candidate for a buyout. I was planning to profile it today, but it deserves its own column. So stay tuned for Saturday’s edition, where I’ll outline all the details on this potential home run…
Your eyes in the Pipeline,