Microsoft NERDs Talk Up Military Robots

CAMBRIDGE, Mass. (TheStreet) -- Microsoft's (MSFT) - Get Report New England Research and Development (NERD) Center this week hosted a gathering of entrepreneurs and venture capitalists, who said startups looking to get rich with robots may have better luck with the military than with consumers.

"There's incredible headroom and growth in the military market," said Michael Greeley, a general partner at

Flybridge Capital Partners

, a venture firm that invests in companies including

PolyRemedy

, a startup that makes wound-care robots.

The robotics industry slumped last year, with shipments down by half from 113,000 units in 2008, according to the International Federation of Robotics. Still, the industry has seen widespread support for robots that perform missions that are life-threatening, said Rod Brooks, co-founder of

iRobot

(IRBT) - Get Report

, which is best-known for its Roomba robot vacuum cleaners.

IRobot also makes the

Warrior

, which disposes of bombs and performs surveillance missions. "The soldiers who operate these robots are 19-year-old kids," said Brooks, who also co-founded the startup

Heartland Robotics

.

The field has caught the attention of manufacturing giants. Farm-equipment maker

John Deere

(DE) - Get Report

sells the R-Gator, an unmanned ground vehicle designed to transport payloads.

Outside the military, the robotics industry faces concerns that robots will replace humans. So startups in search of funding need to be mindful of more than just a useful application.

"It's also a matter of whether this is an application

companies want to delegate to a robot," said Nina Saberi, managing general partner at

Castile Ventures

, a Watham, Mass., venture firm that invests in the stealth-mode robotics startup

North End Technologies

.

Marketing-wise, it makes sense to portray robots as machines that serve people, rather than displace them.

"We're building robots to do the work of

half

a person," said Charles Grinnell, CEO of

Harvest Automation

, a robotics startup in Billerica, Mass., which is still in stealth mode, although the company has divulged that its robots deal with "materials handling."

On the consumer side, robot developers face the unreasonable expectations of a public that grew up watching Rosie, the robot maid on

The Jetsons

; C-3PO, the diplomat robot on

Star Wars

; or KITT, the talking car on

Knight Rider

.

"Everybody expects a certain level of performance," said Tom Ryden, a founder and chief operating officer at North End Technologies. "People almost expect that you're going to develop a humanoid that walks and talks and folds your laundry and does everything else. In fact, we're years from that."

Only recently have ordinary people been able to interact with robots, Brooks said.

"Fifteen years ago, the

Apple

(AAPL) - Get Report

Newton, which was a PDA, was a tremendous failure, but there have been some industry successes since then."

That would include Apple's new iPad, the tablet computer whose demand is outstripping supply.

-- Reported by Carmen Nobel in Boston.