After Softbank’s launch of the US$93B vision fund, they have consolidated one of the key strengths in Japan’s technology industries which is robotics with the acquisition of Boston Dynamics and Schaft from Alphabet Inc.
Reference: SoftBank to buy robotics businesses from Alphabet Inc, Reuters dated 9 June 2017
- In the past few years, SoftBank launched their Pepper robot, which has strong traction in the consumer space in Japan. Outside of Japan, they worked with major enterprises such as banks to launch Pepper in the customer relation management space. In order to maximise the strength of the robot, it requires the enterprise customers to develop digital services with Pepper’s platform API.
- Pepper’s business model is different from major hardware vendors. It adopted a leasing model such that the user of the robot only paid an upfront fee of US$2K, and then followed by an monthly subscription for at least 5 years. For major enterprises, they can afford the Pepper robots with low capital expenditure (CAPEX) and shift it to operating costs (OPEX), similar to Amazon Web Services.
- At one point, many pundits in Japan feared that the robotics industry, long seen as a strength of the country’s technology competencies will be taken over by US, similar to how Apple has surpassed Sony as the consumer electronics brand today. With the acquisition of Boston Dynamics and Tokyo based Schaft, SoftBank can leverage the motion technologies of the companies to improve Pepper to the next phase of consumer robotics, and reclaims Japan’s dominance in the robotics market.
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Photo credits: Picture of Pepper the robot from SoftBank’s website.