Cobot industry is on the way to billions in sales

Munich Small collaborative robots that can work right next to humans are the big hope for growth in the global robotics industry. Above all, the shortage of skilled workers will also force smaller companies to automate in the coming years. Traditional robot manufacturers such as ABB and Kuka as well as innovative start-ups are fighting for market shares in the new segment.

The undisputed world market leader for so-called cobots is Universal Robots (UR). The Danes built the first prototype back in 2007 and, according to industry estimates, should still have a market share of 40 to 50 percent. The company wants to maintain the high growth rate – despite the new competition. “A new cobot company is born every week. That’s great,” says Universal Robots boss Kim Povlsen in an interview with the Handelsblatt.

Fighting for market shares is not that important for him, says Povlsen. So far, only two percent of the potential market has been tapped. “We’re only scratching the surface,” explains Povlsen. The industry is on the way to billions in sales. “There is potential for around nine million cobots,” says Povlsen. The shortage of skilled workers will increase demand in the coming years.

For example, it is becoming increasingly difficult for smaller companies to find welders. The Lower Bavarian family business B&S Blech mit System has set up two welding cells with cobots, reports Managing Director Fabian Schremmer: “We have increased our manual welding workstations, but we quickly reached our limits in terms of both space and staff.”

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The market is still in its infancy. The German Robotics Association (DRV) estimates that less than five percent of the activities in small and medium-sized companies in the manufacturing sector are automated. The overwhelming part will continue to be done “by hand”.

Even in the Corona crisis year 2020, the number of deliveries of collaborative robots rose by six percent to a good 22,000 deliveries, according to the World Robotics Association IFR. “The more cobots are sold and used, the greater the variety of applications,” said IFR Secretary General Susanne Bieller to the Handelsblatt.

Cobots do not take over the tasks of classic industrial robots, but expand the possibilities of automation in the factory. For example, the car manufacturers, the most important customers in the industry, continue to use heavy welding robots behind protective fences. Cobots have been added to this for a number of years, for example when soldering printed circuit boards.

Even if the competition is fierce, Universal Robots has so far been able to defend its strong position. Since entering the market, the Danish pioneer has sold more than 55,000 robots and has thus “far exceeded all expectations”, according to the DRV.

Universal Robots is catching up with Kuka

In the meantime, UR is already selling half as many units per year – measured in terms of units – as Kuka, the German market leader in classic robots. According to the DRV, Universal Robots has the potential “to even become the world’s largest robot manufacturer by the end of the decade”.

Povlsen does not want to commit himself to this goal. “That also depends on how the overall market develops.” However, Universal Robots will be bringing new models onto the market this year and will also move into the segment with higher loads if the need arises. In 2021, the company brought out the UR10e with an increased load capacity of 12.5 kilograms.

Last year, Universal Robots increased sales by 41 percent to $311 million. The world market leader is thus also well above the level before the corona pandemic. “We also started the new year very well,” says Povlsen with a view to 2022.

Kim Povlsen

“We’re only scratching the surface,” says the head of Universal Robots.

(Photo: Universal Robots)

Even if the market is growing, the breakthrough of cobots did not come as quickly as some in the industry had expected. Many machines are still too expensive and too complicated to operate, and small and medium-sized customers in particular still have to be convinced that using them is worthwhile.

The established providers found it difficult to develop small and easy-to-use cobots, especially at the beginning. But now they are making progress. “We want to become one of the leading cobot manufacturers in the world,” said Sami Atiya, head of ABB robotics, to the Handelsblatt. Kuka has also intensified its efforts to gain a foothold in the segment.

Most recently, the Japanese Fanuc group ventured out of cover. When presenting new models, European boss Shinichi Tanzawa announced: “We want to become the clear market leader for cobots in Europe.” Fanuc can currently build 14,000 cobots a month. “And we are planning further expansion.” The machines are particularly in demand for arc welding.

Among the new entrants that are being taken seriously in the industry is Franka Emika, who recently appointed former Google manager Alwin Mahler as CEO. The Munich start-up has developed a sensitive, agile robotic arm including a controller that is already being used by many companies.

More and more cobot start-ups are emerging

Advances in technology and usability are also attracting investors. For example, last year Alexander Samwers investment company Picus Capital became involved in the start-up Coboworx. The company develops ready-to-use robot cells that are particularly easy to install.

There are also a number of start-ups, also in Germany. Agile Robots, for example, develops robot arms – and above all the associated software – that can assemble smartphones, for example. In the most recent round of financing, the company raised $186 million and achieved so-called unicorn status with a valuation in the billions.

But so far, Universal Robots has been able to assert itself. The company was founded by industry pioneer Esben Østergaard and now belongs to the US electronics specialist Teradyne. The success of the Danes is based on three factors, writes the DRV board in a statement. The robots are easy to use and there is a wide range of “plug & play” solutions. Teradyne also helps as a strong parent company “with an urge to move forward”.

UR boss Povlsen sees two competitive advantages in particular: the Danes cooperate with numerous partners who sell the cobots and integrate them with the customers. Then there is the technological ecosystem. Many software companies and users have developed hardware and software for the cobots and solutions for special applications.

The robotics industry, used to success, had a slump at the beginning of Corona, but could benefit from the consequences of the pandemic in the long term. Companies with a higher level of automation found it easier to keep production going.

The industry has returned to a record course. The industry association IFR recently expected an increase of 13 percent to 435,000 newly installed robots for 2021. According to forecasts, in 2024 there will be half a million deliveries for the first time.

The cobots should play an important role in the growth – precisely because new industries and medium-sized users can be developed. “We want to create a world where people work with the robots and not like robots,” says Povlsen.

More: How Saxony wants to become a leading robotics cluster.

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