WHY ROBOTS ARE ON THE RISE - DTNS WEEKLY TECH UPDATE 02/02/2017

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This week Scott and I discussed the rise of robots in manufacturing. So in this week's dispatch I take a closer look at the numbers and  some more about what to look for. The idea is to give you some data to refer to when making up your own mind about what robotics means. 

But first, the news of the week.

NEWS

A Jury decided Facebook subsidiary Oculus must pay Zenimax $500 million for the violation of a non-disclosure agreement by Oculus founder Palmer Luckey. Luckey had worked as a contractor for Zenimax before launching his Kickstarter to start Oculus. The jury found that Oculus was not guilty of misappropriating trade secrets. Zenimax was seeking $4 billion. Instead the fine breaks down with Oculus owing $200 million for breaking the NDA and $50 million for copyright infringement. Oculus and Luckey must pay $50 million each for false designation, and Oculus co-founder Brendan Iribe must pay $150 million for the same charge. http://www.polygon.com/2017/2/1/14474198/oculus-lawsuit-verdict 

Facebook announced it earned $1.41 per share in Q4 on revenue of $8.81 billion, beating expectations of $1.31 and $8.51 billion. Facebook made $3.568 billion profit up 177% on the year. Daily active users for the site increased 18% on the year, up to 1.23 billion. The percentage of users who come back everyday stayed at 66% worldwide but user growth in the US and Canada slowed to just 2 million added daily and monthly users. Mark Zuckerberg told analysts the company will focus on short form video content, calling video a megatrend, and noted 400 million people use Messenger’s audio and video calling each month. https://techcrunch.com/2017/02/01/facebook-q4-2016-earnings/ 

Apple beat expectations reporting Q1 revenue of $78.4 billion up from $75.9 billion with profits of $17.9 billion. Apple sold 78.3 million iPhones up 5% year over year. IPad sales fell 19% to 13.08 million. CEO Tim Cook said the Apple Watch set a revenue record but it’s sales are lumped into the other category which fell from $4.35 billion to $4.023 billion. Apple’s services, including iCloud and Apple Pay jumped 18% to $7.17 billion. Apple says it plans to double that amount in four years leading some to speculate an acquisition may be in the offing. Sales in Greater China fell 12 percent, attributable in part to a weak Chinese currency, though mainland China sales were flat meaning much of the fall came in the Hong Kong market. Apple benefited overall from an extra week in the quarter due to the way the calendar fell. http://venturebeat.com/2017/01/31/apple-returns-to-revenue-growth-in-q1-2017-with-17-8-billion-profit/ 

Microsoft reported revenue of 26.1 billion against expectations of $25.7 billion and earnings of 83 cents a share against expectations of 79 cents. So how did the divisions do? The personal computing division including Windows, Surface devices and Xbox fell 5 percent year over year. The declines came from Surface dropping 2 percent Gaming down 3 percent and phone down 81 percent. The Cloud segment with Azure and Windows Server drove most of the growth  growing 8 percent.  And Productivity and Business which is largely Office, grew 10 percent. LinkedIn contributed $228 million in revenue with a loss of $100 million from its acquisition December 8th. http://venturebeat.com/2017/01/26/microsoft-reports-26-1-billion-in-q2-2017-revenue-azure-up-93-but-phone-down-81-and-surface-down-2/ 

Alphabet reported earnings per share of $9.36 against an expectation of $9.67 and revenue of $26.06 billion against expectations of $25.22 billion. Clicks on Google ads rose 36 percent in the quarter, while cost per click fell 15 percent.Non-advertising business, including things like cloud service GSuite, and hardware like the Pixel phone, grew 62% in revenue to $3.4 billion. Alphabet’s other bets division which includes everything that isn’t Google, including Nest, Fiber and health company Verily, reported $262 million in revenue up from $150 million a year ago and losses of $1.1 billion down from $1.2 billion a year ago. https://techcrunch.com/2017/01/26/alphabets-bets-beyond-search-are-starting-to-look-better/ 

Google CEO Sundar Pichai told analysts he is “comfortable” about the way things will unfold for Google in that space over the coming years, stressing Google’s experience in natural language search and speech recognition. Even so Pichai did not reveal a plan for new business models in voice search to replace lost ad revenue. http://www.businessinsider.com/google-ceo-sundar-pichai-responds-to-concerns-over-monetizing-voice-search-2017-1 

Nintendo reported its first quarterly profit in a year of 32.3 billion yen, lifted by mobile game revenue. However that was still down 3.7 percent over last year and  weak console software sales led to a reduction of Nintendo’s full-year profit outlook by one third to 20 billion yen. Nintendo earned 5 billion yen from Pokemon Go and reported 78 million downloads for Super Mario Run worldwide, with more than 5 percent paying to unlock the game. In total games sales were up 20% on the year.  The mobile version of Animal Crossing has been delayed until the next fiscal year which starts in April,  to focus on the launch of the mobile Fire Emblem: Heroes coming on February 2nd. https://techcrunch.com/2017/01/31/no-not-that-pokemon-game/ --- http://www.theverge.com/2017/1/31/14451180/super-mario-run-paying-conversation-rate-revenue 

The Wall Street Journal reports and TechCrunch has confirmed that Snap Inc, maker of Snapchat will list its stock on the New York Stock Exchange. Recode’s Kara Swisher reports that according to sources, Snap will publicly file its late next week on pace for a March IPO. The company previously filed with the Securities and Exchange Commission in late 2016 to prepare for an IPO, but this will be the first public disclosure of its finances. https://techcrunch.com/2017/01/30/snap-to-list-on-new-york-stock-exchange/ -- http://www.recode.net/2017/1/27/14421726/snap-publicly-file-ipo-next-week 

In light of disappointing Q4 earnings, Fitbit announced it will layoff 110 people, 6 percent of its workforce. Fitbit sold 6.5 million devices in Q4 but saw revenue fall below guidance. CEO James Park said the slowdown was part of a transitional period. He promised the ability to deliver a more personalized experience and upgraded products will stimulate new areas of demand. https://techcrunch.com/2017/01/30/fitbit-layoffs/ 

Waymo increased the number of miles its autonomous cars drove in California in 2016 while decreasing the number of disengagements. A disengagement is when a human has to take control of the car for any reason, from events on the road to pauses to adjust software or squash a bug in the code. Disengagements were 0.8 per 1,000 miles in 2015 and fell to 0.2 per 1,000 miles in 2016. Most of the driving was in the more challenging city and suburban areas as well. The raw numbers are 124 total disengagements in 2016 over 635,868 miles. https://techcrunch.com/2017/02/01/waymos-self-driving-tech-got-a-lot-better-in-2016/ 

Bloomberg’s Mark Gurman and Ian King have sources who say Apple is developing an ARM chip to handle low power functions on future laptops. The chip, called the T310, reportedly went into development last year and is similar to the T1 processor used for the MacBook Pro’s Touch Bar. Unlike the T1 chip, the T310 would have access to other system resources like storage and networking. It may show up in upgraded MacBook Pros expected later this year. https://www.bloomberg.com/news/articles/2017-02-01/apple-developing-new-mac-chip-in-test-of-intel-independence 

As expected Apple has joined the Partnership on AI as a founding member alongside Amazon, Google, Facebook, IBM and Microsoft. Members agree to establish best practices and publish research under an open license. Apple will be represented by Siri co-founder Tom Gruber who is now head of advanced development for Siri at Apple. http://venturebeat.com/2017/01/27/apple-joins-amazon-google-facebook-in-partnership-on-ai-research-project/ 

AT&T announced it will roll out 5G service in Austin and San Francisco later this year, with promised speed of 400 Mbps. True 5G service should hit the 1Gbps speed which AT&T says it should be able to achieve by the end of the year. AT&T also announced it will start testing AirGig which uses power lines to transmit data wirelesly at gigabit speeds. http://www.theverge.com/2017/2/1/14474434/att-5g-network-launch-austin-indianapolis-markets 

Dropbox launched Paper globally Monday, a basic document editor, which allows collaboration and a timeline of tracked changes, with project management features in the works. Another feature called Smart Sync is launching with speedier automatic syncing, eliminating storage requirements on the hard drive. Paper launches for all users in 21 language markets now, though you’ll need an enterprise or business plan to use administrative features. Smart Sync is only available as an early access program for business customers. http://www.theverge.com/2017/1/30/14435582/dropbox-paper-business-app-launch-date-ios-android-web 

Slack announced Slack Enterprise Grid designed to scale its service to companies with tens of thousands of employees. Companies can create an unlimited number of workspaces with a unified login system. Users can talk across teams with shared channels and an administrative layer manages it all. Slack also has FINRA and HIPAA certifications for use by financial and medical organizations as well as integration with eDiscovery, data loss prevention and offsite backup providers. IBM, Paypal and Capital One are among the companies who have deployed Slack Enterprise Grid. http://www.theverge.com/2017/1/31/14453534/slack-app-enterprise-grid-launch-announced 

An artificial intelligence developed by researchers at Carnegie Mellon, called Libratus, beat four of the world’s best professional poker players in a 20-day 120,000-hand Heads-up No-Limit Texas Hold’em competition at Rivers Casino in Pittsburgh. The program would analyze holes in its strategy each day in order to adapt for the next day’s play. Libratus, was up $1,766,250 in chips by the end of the experiment. However the AI didn’t get any money.The losing humans split a pot of $200,000 based on performance. https://techcrunch.com/2017/01/31/carnegie-mellon-creates-a-poker-playing-ai-that-can-beat-the-pros/ 

Namco founder Masaya Nakamura has died at 91. Nakamura was often called the “Father of Pac-Man” for heading the company that brought engineer Toru Iwatani’s creation to market in 1980. Nakamura founded Namco in 1955 with two mechanical horse rides on a department store rooftop. https://www.bloomberg.com/news/articles/2017-01-30/japanese-arcade-pioneer-father-of-pac-man-has-died 

CLOSER LOOK - ROBOTS ON THE RISE

Robots have been used in manufacturing for years. But robot orders for industry are rising fast. What's the difference? Smarts.

In the past most industrial robots could follow a program to do a prescribed operation but not adapt to their surroundings. Hiowever with the advances in machine learning, neuro-linguistic programming and AI, robots can now handle more ambiguous situations.

Instead of being programmed to move from one corner of a warehouse to another, robots can now be told where to go and find their own way. That's more efficient and safer.

The Robotic Industries Association reported Tuesday that North American business ordered 34,606 robots in 2016, up 10% over 2015. Sales rose from $1.8 billion to a new high of $1.9 billion.

http://fortune.com/2017/01/31/north-american-businesses-robots/ 

http://www.businesswire.com/news/home/20170131005260/en/2016-Breaks-Records-North-American-Robot-Orders 

The orders broke down by country as follows:

US: 31,000 

Mexico: 4,700 

Canada: 2,700

We don't have the International Federation of Robotics 2016 report yet, but looking at the 2015 numbers you get an idea of where the rest of the world is heading. The 2016 numbers are expected to be larger but in 2015 the worldwide market broke down like this:

2015 numbers

China: 69,000

Japan: 35,000

South Korea: 38,000

So who's ordering the robots. As you might expect, the automotive industry is still ordering the lion's share of the bots. 20,000 robots and components were ordered in 2016 in the US, a rise of 25%. Next in line is the food and consumer goods industry where robots can speed up packing and also inspect for quality. Food and consumer goods robot orders were up 32%.

Next in line are the electronics industry, plastics  and life sciences. Pharmaceuticals in particular can use more robots for quality inspection.

POPULAR ROBOTS

Across the various industries robots do more than just weld and rivet. The most popular models still place and pick up objects on an assembly line. But more robots are packaging followed by the more traditional cutting or forging of materials.

However s small but fast growing function for robots is vision and motion control. BCC Research says, “The global market for machine vision (MV) system components should reach $19.0 billion and $30.8 billion in 2016 and 2021”

https://globenewswire.com/news-release/2017/01/19/909258/0/en/Global-Market-for-Machine-Vision-Technologies-Eyes-Double-Digit-Growth-Reports-BCC-Research.html 

In many of the inspection uses mentioned, 3D Machine Vision uses cameras, sensors and computers to detect defects.

WHY THE RISE?

The ability for robots to conduct tracking and safety functions are on e of the big reasons for increased orders. Speed and productivity increases combined with falling prices are also fueling the rise. 

http://www.vision-systems.com/articles/print/volume-22/issue-1/features/robots-and-vision-team-up-to-speed-automation-tasks.html 

WHERE NEXT?

A record 20,000 attendees are expected at Automate 2017, April 3-6 in Chicago. Expect more announcements and a sense of how robots, Internet of Things, and machine learning are being marketed and implemented.

https://www.automateshow.com/ 

BUZZWORD ALERT: Keep an eye out for talk of "cyber-physcial systems." It basically means a robot with an Internet connection.

Also watch out for “Smart Factory” which describes a manufacturing process that uses IoT, robots, and data processing.