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Monday, February 10, 2020

Global Upside for Robotic Systems and Drones Market

Global spending on robotic systems and drones will reach $128.7 billion in 2020 -- that's an increase of 17.1 percent over 2019, according to the latest worldwide market study by International Data Corporation (IDC). By 2023, IDC expects the investment will reach $241.4 billion with a compound annual growth rate (CAGR) of 19.8 percent.

Robotic systems will be the larger of the two categories throughout the five-year forecast period with worldwide robotics spending forecast to be $112.4 billion in 2020. Spending on drones will total $16.3 billion in 2020 but is forecast to grow at a faster rate (33.3 percent CAGR) than robotics systems (17.8 percent CAGR).

Robotics and Drones Market Development

Hardware purchases will dominate the robotics market with 60 percent of all spending going toward robotic systems, after-market robotics hardware, and system hardware. Purchases of industrial robots and service robots will total more than $30 billion in 2020.

Meanwhile, robotics-related software spending will mostly go toward purchases of command and control applications and robotics-specific applications. Services spending will be spread across several segments, including systems integration, application management, and hardware deployment and support.

Services spending is forecast to grow at a slightly faster rate (21.3 percent CAGR) than software or hardware spending (21.2 percent CAGR and 15.5 percent CAGR, respectively).

"Software developments are among the most important trends currently shaping the robotics industry. Solution providers are progressively integrating additional software-based, often cloud-based, functionalities into robotics systems," said Remy Glaisner, research director at IDC.

Equally important is the early trend driven by burgeoning 'software-defined' capabilities for robotics and drone solutions. The purpose is to enable systems beyond some of the limitations imposed by hardware and to open up entirely new sets of commercially viable use-cases.

Discrete manufacturing will be responsible for nearly half of all robotics systems spending worldwide in 2020 with purchases totaling $53.8 billion. The next largest industries for robotics systems will be process manufacturing, resource industries, healthcare, and retail.

The industries that will see the fastest growth in robotics spending over the 2019-2023 forecast are wholesale (30.5 percent CAGR), retail (29.3 percent CAGR), and construction (25.2 percent CAGR).

Spending on drones will also be dominated by hardware purchases with more than 90 percent of the category total going toward consumer drones, after-market sensors, and service drones in 2020. Drone software spending will primarily go to command and control applications and drone-specific applications while services spending will be led by education and training.

Drone software will see the fastest growth (38.2 percent CAGR) over the five-year forecast, followed closely by services (37.6 percent CAGR) and hardware (32.8 percent CAGR).

Consumer spending on drones will total $6.5 billion in 2020 and will represent nearly 40 percent of the worldwide total throughout the forecast. Industry spending on drones will be led by utilities ($1.9 billion), construction ($1.4 billion), and the discrete manufacturing and resource industries ($1.2 billion each).

IDC expects the resource industry to move ahead of both construction and discrete manufacturing to become the second largest industry for drone spending in 2021. The fastest growth in drone spending over the five-year forecast period will come from the federal/central government (63.4 percent CAGR), education (55.9 percent CAGR), and state or local government (49.9 percent CAGR).

Outlook for Regional Growth in Technology Investment

On a geographic basis, China will be the largest region for drones and robotics systems with overall spending of $46.9 billion in 2020. Asia-Pacific (excluding Japan and China) will be the second largest region with $25.1 billion in spending, followed by the United States ($17.5 billion) and Western Europe ($14.4 billion).

China will also be the leading region for robotics systems with $43.4 billion in spending this year. The United States will be the largest region for drones in 2020 with spending of nearly $5.7 billion.

The fastest spending growth for robotics systems will be in the Middle East & Africa which will see a five-year CAGR of 24.9 percent. China will follow closely with a CAGR of 23.5 percent. The fastest growth in drone spending will be in APeJC, with a five-year CAGR of 78.5 percent, and Japan (63 percent CAGR).