Research and analysis firm IDC today updated its forecast for global spending on robotics systems and drones, forecasting $128.7 billion for 2020, with spending expected to reach $241.4 billion by 2023.

IDC said the 2020 forecast on spending is an increase of 17.1% over 2019, with spending on average reaching a compound annual growth rate (CAGR) of 19.8% through 2023. The forecast is part of an update to the company’s Worldwide Robotics and Drones Spending Guide.

Like its 2019 forecast, IDC said robotics systems will be the larger of the two categories through the five-year forecast period. Robotics spending is expected to reach $112.4 billion this year, while spending on drones will reach $16.3 billion in 2020, IDC says. However, the growth rate for drones through 2023 is expected to be faster (33.3% CAGR) for the drones space than robotics (17.8% CAGR).

Hardware purchases will continue to dominate the robotics category, with 60% of all spending going to robotics systems, after-market robotics hardware, and system hardware, the research firm said. Spending on industrial robots and service robots will reach $31 billion, it added.

On the software side, spending will mostly go toward purchases of command-and-control applications and robotics-specific applications. Services spending is expected to be spread across several segments, including systems integration, application management, and hardware deployment and support, IDC said. The services area will grow at a slightly faster rate (21.3% CAGR) than software (21.2% CAGR) or hardware spending (15.5% CAGR).

“Software developments are among the most important trends currently shaping the robotics industry,” said Remy Glaisner, research director of the Worldwide Robotics: Commercial Service Robots service at IDC. “Solution providers are progressively integrating additional software-based, often cloud-based, functionalities into robotics systems… 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.”

Breaking down its forecasts further, IDC said discrete manufacturing will be responsible for nearly half of all robotics systems spending worldwide in 2020, with $53.8 billion in revenues. The next largest industries will be process manufacturing, resource industries, healthcare, and retail. Industries expected to see the fastest spending growth over the next five years include wholesale (30.5%), retail (29.3%), and construction (25.2% CAGR).

Use cases for robotics systems in 2020 include welding ($20 billion forecast), assembly ($14.9 billion, and pick-and-pack ($12.3 billion), IDC said. Use cases with the fastest growth in spending expected over five years include shelf-stocking (46.5% CAGR) and customer service (42% CAGR).

“Despite a pending trade agreement between the U.S. and China, it appears that tariffs may remain in place on many robotics systems,” said Jessica Goepfert, program vice president of IDC’s Customer Insights & Analysis service. “This will have a negative impact on both the manufacturing and resource industries, where robotics adoption has historically been healthy. The additional duties will likely slow investment in the robotics systems used in manufacturing processes, automated supply chains, and mining operation.”

Drone hardware dominates

In the drone space, spending will be dominated on hardware purchases, with more than 90% fo the category going to consumer drones, after-market sensors, and service drones in 2020, IDC said. On the software side, spending will go to command-and-control applications, and drone-specific applications. Services spending will be led by education and training. Software will see the fastest growth (38.2% CAGR) over the five-year forecast, followed by services (37.6% CAGR0 and hardware (32.8%).

Breaking down the types of drones or industries where they will be used, IDC forecasts:

• Consumer drones – $6.5 billion in 2020, representing 40% of the worldwide total.
• Utilities – $1.9 billion
• Construction – $1.4 billion
• Discrete manufacturing ($1.2 billion)
• Resource industries ($1.2 billion), which will likely reach the third spot by 2021.

The fastest growth rate in drone spending over the next five years will come from federal/national governments (63.4% CAGR), education (55.9%), and state/local governments (49.9% CAGR), IDC said.

“We expect to see some price increases as drone manufacturers pass on the cost of tariffs imposed on the import/export of drones,” said Stacey Soohoo, research manager of the customer insights service at IDC. “The construction and resource industries will particularly feel the effects of these price increases. In contrast, many consumer drone manufacturers have chosen against raising prices and are absorbing the additional costs in order to maintain supply and to satisfy continuing consumer demand for drones. While the pending trade agreement offers some hope, these industries will face additional headwinds as long as tariffs remain in place.”

IDC compiled spending data for more than 60 use cases across 20 industries in nine regions as part of its spending guide. Data is also available for 18 robotics systems technologies and 17 drone systems technology. The research firm said the guide is designed to help suppliers to identify market opportunities and execute an effective strategy.

IDC’s forecast falls in line with some other recent forecasts for robotics. In September 2019, the International Federation of Robotics showed global industrial robot annual sales of $16.5 billion in 2018, with a 12% growth rate of 12% per year from 2020 to 2022. The Robotics Industries Association, which tracks North American robot unit orders, said robot unit orders were up 5.2% through the first three quarters of 2019. ABI Research recently forecast a total market valuation of $277 billion by 2030.

In their forecast, ABI Research said the mobile robotics space will begin to overtake the traditional industrial robotics market by 2022, given a wider range of use cases for mobile autonomy. “Everyone talks about self-driving passenger vehicles, but mobile automation is far more developed in intralogistics for fulfillment and industry,” said Rian Whitton, senior analyst at ABI Research. “Many new verticals, like hospitality, delivery, and infrastructure, will demand systems that do not require external physical infrastructure to move about.” In addition, automated forklifts, cleaning robots and quadrupeds are expected to help boost the growth of mobile robotics, the firm said.

By 2030, the revenues for mobile robotics is expected to exceed $224 billion, compared to a $39 billion forecast for industrial and collaborative systems, ABI forecasted.