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Robotics Industry News

Weekly Bot Brief on Robotic Research and Investment Review 12-1-2017

Balcones Investment Research

Bot Brief Index Highlights:Bot Index for 12/1/2017

In a dramatic reversal from most of the past year’s U.S. equity trading pattern, the paths of the S & P 500 and that of the NASDAQ dramatically diverged last week. Since many of the components of the Bot Index trade on the NASDAQ, the robotic index fell 1.16% versus the broader market’s increase of 1.53%. The major weakness in the Bot Index was experienced by robotic stocks that have been among the companies that have performed most strongly this year. Led by an 18.40% decline by Ekso Bionics, other losers during the week included NVIDIA Corp. (-8.89%, Keyence Corp. (-7.79%), and Mazor Robotics (-6.89%).

The greatest gainer for the week was Immersion Corp. whose shares jumped 20.38% on the announcement that CEO Vic Viegas was booted by the Board of Directors and replaced by Carl Schlachte, the current Chairman of the Board. Mr. Schlachte also serves as CEO of a thermal management technologies company and has a strong business background. Other leaders were Oceaneering International that rose 5.26% and Lincoln Electric Corp.  gaining 3.19% for the week.

Bots In The News This Week:

The Economist reported on nursing care robots last week in its article entitled ‘Robonurses, Machine Caring. The feature addressed the special needs of the elderly, whether physical or emotional, and several firms’ unique answers to the growing world-wide issue of an advancing aging population. The government of Japan suggested that the market for ‘carerobots’ will triple by 2020 to over $480 million. Currently, there are 5,000 nursing homes that are in some phase of robot testing for their charges. Of the firms noted - Cyberdyne, SoftBank, Intelligent System and Sony – only Cyberdyne is a component of the Bot Index.

Unfortunately, in its 154-page tome The World in 2018, The Economist devoted only one page, of a mere five paragraphs, to a discussion of robotics. Perhaps because the article focused entirely upon an Oxford/Yale poll of the attendees at two AI conferences that basically drew out the timeline for any meaningful application of AI into robotics, the publication failed to accept the immediate (2018) advancement of robotics into the global environment. For example, the respondents suggested robotic matching human performance in truck driving to be not before ten years, telephone bank operation in seven years and folding laundry in 5 years. Of the more sophisticated tasks, the projections were fifteen years for retail clerks, 37 years for surgery, and 125 years for a full matching of all human labor. Interestingly, many of the suggested long-term tasks are already being partially or totally conducted today by robots.

In stark contrast to the Oxford/Yale poll, McKinsey & Co. reported to Bloomberg Technology their study on robots and employment with the conclusion that 800 million jobs worldwide could be lost to automation by 2030. McKinsey noted that machine operators, fast food restaurant workers and back office staff would be most impacted by robotics, with China and India bearing the predominance of the declines.

This week noted the opening of the IREX International Robot Exhibition 2017 in Tokyo which was entitled, ‘The Robot Revolution Has Begun – Toward Heartwarming Society’. Over 300 exhibitors will be displaying their industrial or service robots in the world’s largest convention devoted exclusively to advancing robotic technologies.

Highlighted in the IREX Exhibit, Toyota introduced its new robot T-HR3 that mimics the movements of its operator. The 5-foot-tall, 165-pound robot looks and has movements similar to humans (two legs, two arms, a torso and a head) and is controlled by a wearable system of the operator. It is expected the robot will find application in healthcare and in situations unsuitable or even hostile to humans.

Amazon has always diverged from the normal U.S. corporate strategy of driving earnings to meet analysts’ expectations. Their goal has been to keep margins razor thin and plow back revenues into business expansion in order to gain market share or technological advances. This week, however, the money machine of Amazon – Amazon Web Services, introduced an artificial intelligence camera that is specifically designed to assist AI developers to build systems that can be run through the camera and into Amazon Cloud Services.

In order to save time and avoid inner city traffic, Mercedes has developed a drone delivery system for a variety of smallish products. In what would be possibly a $500 million-euro project to capture a portion of the explosion in online retail business, Mercedes recently tested over 100 distributions of coffee and cellphone products to Mercedes-Benz Vito delivery vans for final delivery to customers. The tests were extremely satisfying to management who views the combination of drone to van as a major cost saving on product distribution.

Last year, The Bot Brief featured the underseas mining of manganese nodules within the Japanese Exclusive Economic Zone (EEZ) by JAMSTEC, the Japanese Agency for Marine-Earth Science and Technology. With two-thirds of the earth’s surface covered by oceans, it only makes sense to view opportunities to responsibly utilize sub-sea mineral bounty. On CNBC this week a company, Moon Express, intends to send a rocket in 2018 to the moon to mine known, and possibly unknown, elements and return to Earth. The heady venture is also seeking to win certain prizes (up to $30 million) that have been established under the Google Lunar XPRIZE. While an interesting venture, organizations such as JAMSTEC and Woods Hole perhaps have a more financially reasonable and practical approach to the exploration of little known environs.

This past August JAMSTEC undertook a venture to film the world’s deepest sea creatures. At a depth of 8,178 meters in the Mariana Trench and the utilization of a newly designed compact hadal-lander with 4k video cameras, the research organization filmed snailfish eating bait on the lander. During the exercise, several dark colored stones were noted on the ocean floor (perhaps like the manganese nodules JAMSTEC noted within the EEZ around Minamitorishima). While filming snail fish may seem somewhat trivial, the quest for knowledge of undersea life is important. How the snailfish can withstand the pressures of such deep water, that requires specialized equipment simply to photograph the creature, can add to our engineering knowledge base. Just in the past few years, a protein named apoaequorin, whose extract has been proven to improve memory in humans, has been discovered in jellyfish venom. Certainly, the bounty from the sea vastly outweighs the potential from mining of the moon and the logistics that it requires.

The Bot Brief is a weekly newsletter designed for economists, investment specialists, journalists and academicians. It receives no remuneration from any companies that may from time to time be featured and its commentaries, analysis, opinions and represent the subjective views of Balcones Investment Research, LLC. Due to the complex and rapidly changing nature of the subject matter, the company makes no assurances as to the absolute accuracy of material presented.

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