ROBOT AS A SERVICE MARKET ANALYSIS

Robot As A Service Market Size and Trends

The global robot as a service market is estimated to be valued at US$ 2.05 billion in 2024 and is expected to reach US$ 6.42 billion by 2031, exhibiting a compound annual growth rate (CAGR) of 17.7% from 2024 to 2031.

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The robot as a service market is witnessing high growth trends on the back of surging demand across industries for smart automation and robotics-based services. Developing application areas such as mobile robotic solutions for material handling, drones for inspections, and industrial robots in manufacturing are expected to provide significant impetus to market expansion over the next few years. Major technology players are heavily investing in developing advanced, AI-powered collaborative robots (cobots) that are revolutionizing human-robot collaboration in manufacturing. These AI-enabled cobots offer enhanced productivity, flexibility, and safety, enabling new business models like Robot as a Service (RaaS).

Furthermore, key market participants are forming strategic partnerships to leverage these robotic solutions across diverse industry verticals, including healthcare, warehousing, logistics, and waste management. This is strengthening their global market presence and driving the widespread adoption of cobots, as the convergence of cobots and AI transforms the manufacturing landscape.

Growing Costs of In-house Automation

Large manufacturing companies and businesses have traditionally relied on expensive capital investments to automate processes within their facilities. Robots require high upfront costs for equipment, tools, and programming which needs to be planned for months if not years in advance. Once installed, robots also need maintenance crews and technical support staff on payroll to ensure optimal performance. This heavy dependence on fixed automation assets limits the flexibility of businesses to adapt quickly to changing market needs.

The flexibility and scalability offered by robot as a service provider is solving this problem for many firms. By outsourcing their automation requirements to external vendors, businesses can now automate processes without worrying about large capital outlays or long-term ownership of robotic machinery. They pay only for the hours of usage through an operational expenditure model. This allows even small to medium enterprises to leverage advanced robotic technologies which were earlier only feasible for large corporations. The outsourced model also removes the complications of managing robot maintenance staff and upgrades. Service providers take care of everything related to robot upkeep remotely. If business needs change, the robotic resources can be scaled up or down quickly through the on-demand access provided. Overall operational costs are reduced while flexibility and adaptability to market dynamics are vastly improved.

For instance, in April 2020, several Japan-based companies such as UBTECH Robotics developed medical robots capable of monitoring body temperatures and conducting disinfection tasks in hospitals. This development, along with other factors such as the growing demand for automation and robotics across various industries, including logistics, manufacturing, healthcare, and retail, significantly increased the demand for robot-as-a-service (RaaS) solutions.

Market Concentration and Competitive Landscape

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Democratization of Advanced Technologies

Robotics and other forms of advanced automation have huge potential to transform industries but have largely remained concentrated within a few early-adopting sectors so far. One reason for this has been the high barriers to entry for businesses in other domains wanting to experiment with and integrate these technologies. The large upfront capital requirements, technical expertise needed, and long lead times acted as deterrents. Robot as a service eliminates these entry obstacles by providing pay-per-use access to even the most sophisticated robotic machinery on the market.

This on-demand, usage-based commercial model democratizes robotics and other emerging technologies by placing them within financial and operational reach of any organization regardless of size, industry, or location. Entrepreneurs, smaller manufacturers, food processors, warehouses, and various other businesses can now evaluate and pilot cutting-edge automation solutions without heavy investments. Service providers take care of the integration while clients focus only on defining their requirements. Progress is no longer constrained by capital funding cycles either. The wider availability of robotic technologies on tap is spurring innovative new applications and use cases that will drive further technological evolution as well as economic growth across sectors.

Key Takeaways from Analyst:

The rising demand for automation across industries such as manufacturing, healthcare, logistics, and warehousing will be a key driver of growth. With robot as a service, companies can leverage the latest robotic technologies without making substantial capital investments. This flexible delivery and payment model makes automation accessible to more businesses.

North America currently dominates the market owing to strong industrial automation adoption and early technology development in the region. However, Asia Pacific is expected to emerge as the fastest growing regional market with China and India in the forefront. Their large manufacturing sectors and growing need to improve productivity will fuel renin-angiotensin-aldosterone system (RAAS) adoption.

Europe will also witness steady demand though high initial costs can hamper widespread deployment. Lack of standardization remains a challenge as different vendors offer proprietary robots and platforms. Interoperability issues need to be addressed to streamline integrations.

While industrial robots account for most of current sales, service robots are gaining ground particularly for medical, public safety, and logistic applications. New entrants are developing innovative robots for applications like agricultural crop management, urban security, and waste management. If successful, they can open up new revenue streams.

Market Challenges: Technical Issues & Complexities

Technical issues and complexities are significantly restraining the growth of the global robot as a service market. Deploying robots and integrating them effectively into business workflows is a major challenge for many organizations. Robots today still have notable limitations in terms of computational power, adaptability, mobility, flexibility, and ease of programming. Achieving reliable and seamless human-robot collaboration also remains an area that requires further advancement. This negatively impacts the pace of adoption in many industrial sectors.

These technical roadblocks are more pronounced in certain application areas compared to others. For instance, implementing robotics for complex manufacturing tasks that involve unpredictable human behaviors or dynamic, unstructured environments is considerably difficult than for repetitive jobs on a factory floor. Customizing robots for varied on-site conditions and regular software/hardware upgrades also require substantial upskilling of in-house technical teams which increases the total cost of ownership. As many small and medium enterprises have limited in-house R&D resources, they tend to be more conservative in investing upfront in advanced robotics solutions.

Market Opportunities: Increasing Investments and Funding

Increased investments and funding open the door for more innovation and advancements in robotic technology. As capital flows into research and development, they are likely to see robots that are more affordable, versatile, and capable of assisting humans in new ways. With greater access to capital, companies both large and small will have the means to design, build, and test novel prototypes. Some nations are also using public financing to encourage private sector job creation through robotics.

By sustaining investment streams, the robot as a service model in particular has a very promising future. Customers can leverage variable pricing and pay-per-use options while avoiding large upfront hardware costs. For businesses seeking flexibility and scalability, renting robotic abilities on an as-needed basis is appealing. With dependable funding sources, RaaS platforms may better respond to evolving market needs through new suppliers, integration of cutting-edge technologies like AI, and customized solutions. Overall, increased investments and financing across both private and public spheres present a considerable growth driver looking ahead as they fuel robotic advancement into novel domains.

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Insights by type, profession service robot contributes the highest share of the market owing to rapid industrial automation

The professional service robot segment dominates the global robot as a service market with 53.4% of the market share in 2024 due to the increased need for industrial automation across various industries. Professional service robots are specifically designed for performing industrial tasks such as material handling, assembly, packaging, inspection, welding, painting, spraying, and others. Their use allows manufacturing facilities and warehouses to enhance productivity, reduce costs, improve quality, and ensure workplace safety.

Within the professional service robot category, mobile robots have seen tremendous growth in adoption rates in recent years. They can autonomously navigate industrial floors to transport materials between different production and packaging stations. This reduces reliance on human labor for repetitive material movement tasks and frees up workers to focus on more value-adding activities. Moreover, mobile robots provide flexibility to easily reconfigure production lines as per changing demand without major retrofitting costs.

Another highly utilized professional service robot type is collaborative robots or cobots. Cobots are designed to work closely alongside human workers without the need for safety fences. Their implementation helps to automate dangerous and ergonomically unsafe manual jobs while allowing human supervision for quality control. Leading manufacturers are deploying cobots for assembly, packaging, small parts handling and machine tending to augment the workforce. Their user-friendly design lowers the skills requirements for operators.

The growing complexities in production processes, demand for mass customization and shortage of labor have made just-in-time inventory management essential for factories. Here logistics robots play a vital role in streamlining material workflows right from incoming to outgoing docks. Their round-the-clock operations ensure optimal inventory levels are maintained to minimize production disruptions. This drives greater operational efficiency and cost savings.

Insights by end-use industry, logistics contributes the highest share of the market driven by e-commerce growth

The logistics segment accounts for 31.2% share in 2024 of the robot as a service market owing to the boom in e-commerce activities worldwide. The explosive growth of online shopping over the past decade has put tremendous pressure on logistics and delivery companies to meet rising consumer demands and expectations within tight timelines. This is where robotics solutions have played a pivotal role in automating warehousing and fulfillment operations to accelerate throughput.

A core function of logistics robots is to pick, transport, and sort products inside distribution centers with extreme precision and speed. They can identify items within vast inventories, retrieve them from shelves, and route them to packaging stations for delivery preparation - all without breaks. This level of round-the-clock productivity is impossible for humans to match. The use of autonomous mobile robots (AMRs) for these intralogistics tasks has therefore become indispensable for e-commerce giants and their third-party logistics partners.

Logistics operators are also increasingly leveraging robotic arms for specialized applications such as unpacking deliveries, inspecting packages, and palletizing items. Comparatively cheaper and safer alternatives to traditional conveyor-based systems, robotic arms allow for flexible micro-fulfillment center designs tailored to ever changing product assortments and order profiles. Their dynamic placements and orientation abilities maximize available spaces inside warehouses.

Last-mile deliveries present the final frontier for logistics robotics. Experimental delivery bots are being road tested to autonomously transport shipments from distribution centers to customers' doorsteps. While still facing regulatory hurdles, their successful commercialization could substantially cut costs and turnaround times for last-mile logistics networks serving ever more dispersed residential populations.

Regional Insights

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North America is expected to dominate the global robot as a service market with 43.6% share in 2024. The strong presence of technology giants and startups has spearheaded the research and development of robotics solutions in the region. Countries like the U.S. and Canada have a well-developed industrial automation industry utilizing various types of robots for applications across industries such as healthcare, transportation, logistics, and others.

The sizable domestic market for robotics and the presence of global leaders have encouraged local companies to offer robot as a service model rather than upfront capital purchase of robots. This has significantly lowered the entry barriers for various industries to leverage robotics. Moreover, North America is a hub for technological innovations, and introduction of new categories of robots such as collaborative robots is first tested and adopted widely in this region. Growing labor costs have further prompted manufacturers to deploy robotics solutions on a subscription or pay-per-use basis rather than owning the equipment.

The Asia Pacific region is poised to be the fastest growing market for robot as a service in the coming years. Countries like China, Japan, South Korea, and India are witnessing tremendous growth in industrial and service robotics adoption. With increasing labor costs and shortage of workforce, many industries have started moving their manufacturing bases to Asia Pacific while also automating processes using robotics.

China, in particular, has emerged as a leader in industrial robotics production and is witnessing heavy investment in AI and robotics technologies by both public and private organizations. Robot manufacturers are also customizing their offerings as per the requirements of Asian customers and offering different pricing models such as pay-per-use to make robotics solutions more accessible. This growing industrialization along with supportive government policies is expected to drive strong demand for robot as a service solution across various applications over the next five years.

Market Report Scope

Robot As A Service Industry News

• In March 2023, Körber, a prominent automation solutions provider, announced the launch of a new Robot-as-a-Service (RaaS) program. This program aims to help Körber's clients gain access to a global network of robotics service partners, enabling them to leverage advanced automation technologies and solutions without the need for significant upfront investments or in-house robotics expertise.
• In November 2022, Smart Robotics Inc. introduced a collaborative robot (COBOT) that can select products from production facilities owned by businesses. This smart robot, designed for lightweight items such as office supplies and papers, is a part of the company's efforts to provide innovative, user-friendly, and flexible solutions for packaging and logistics applications in various industries.
• In February 2022, Ricoh Company, Ltd. acquired Axon Ivy AG, a Swiss-based digital process automation company, as a strategic investment to expand Ricoh's capabilities in digital services and support its transformation into a global digital services provider.
• In May 2020, IPsoft's conversational AI platform Amelia and the Canadian automation company GlobalDWS collaborated to develop disinfection service robots (DSR). These robots are equipped with high-pressure atomizers to eliminate harmful bacteria and viruses from target areas.

*Definition: The global robot as a service market provides an innovative on-demand robotics platform where customers can access robots, related systems, and services through an operational expense model. Companies in this market offer collaborative robots with built-in intelligence, mobility, and dexterity that can assist in applications like assembly, pick and place, product inspection, quality control, and warehouse automation. Customers benefit from increased flexibility with no large upfront capital costs and unlimited scalability as needs change.

Market Segmentation

• Type Insights (Revenue, US$ Bn, 2019 - 2031)
• • Profession Service Robot
  • Personal Service Robot
•  End-use Industry Insights (Revenue, US$ Bn, 2019 - 2031)
• • IT & Telecom
  • BFSI
  • Defense
  • Logistics
  • Healthcare
  • Retail
  • Food & Beverage
  • Media & Entertainment
  • Others
• Regional Insights (Revenue, US$ Bn, 2019 - 2031)
• • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • South Africa
    • Rest of Middle East & Africa
• Key Players Insights
  • ABB Ltd.
  • Amazon Robotics
  • Boston Dynamics
  • Dyson Ltd.
  • FANUC Corporation
  • Hanson Robotics Limited
  • iRobot Corporation
  • Intuitive Surgical Inc.
  • KUKA AG
  • Northrop Grumman Corporation
  • SoftBank Robotics Holdings Corp.
  • UBTECH Robotics Corp.
  • Yaskawa Electric Corporation
  • Yujin Robot, Co., Ltd.
  • Zebra Technologies Corporation