Collaborative Robots Forge New Markets -- and M&A -- For Robotics

NEW YORK (The Street) -- The market for robotics just expanded dramatically. 

Massachusetts-based Teradyne's  (TERacquisition last week of Danish company Universal Robots underscores the growing market for collaborative robots -- an inexpensive, semi-sentient robot that works alongside humans in factory settings. 

"The acquisition was a surprise and portends more M&A activity in the space," says Travis Briggs, chief executive officer at Robo-Stox, a global robotics and automation index. "It adds a new growth area for Teradyne and provides selling opportunity to existing customer base."

Collaborative robots have applications in a variety of settings, including manufacturing at small businesses and large organizations alike.

At a recent industry conference, Rethink Robotics co-founder Rodney Brooks, who co-founded iRobot (IRBT), talked about the market for collaborative robots in performing simple tasks and caring for seniors at care facilities.

The operational flexibility of collaborative robots (they can be programmed to work up or down the assembly line or to perform other retail-related tasks) makes numbers regarding their market size "speculative," said Ulrik Jorring, Senior Vice President at the Danish Growth Fund, the main investor in Universal Robots.

They have, however, made the potential market for robots bigger.

Despite their obvious economic benefits, robots have had limited traction in non-automotive industries.

A recent study by the International Federation of Robotics (IFR) estimated that there were only 200 robots per 10,000 workers in non-automotive industries. That's because of the robots are large, expensive, and present work-safety concerns.

To get an idea of how expensive industrial robots are, look at the advanced robotics spot welder, whose average cost was $133,000 in 2014. Although that figure is expected to drop by 25% in 2025, the cost of a robot still wouldn't be affordable for most small- and medium-sized enterprises.

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