Chinese e-commerce firm Alibaba Group Holding Ltd (NYSE:BABA) and FOXCONN TECHNOLOGY (OTCMKTS:FXCOF) have announced that they will venture into the robotics industry through SoftBank Robotics Holdings (SBRH).
The two firms will invest 145 yen ($118 million) in SBRH TO GAIN 40% the total shareholding. Foxconn and Alibaba will divide the ownership by half, meaning each will take 20% ownership in the Japanese telecommunications giant. Softbank Robotics Holding Corp will remain with 60% of the share ownership.
One of the projects that the three companies will focus on is the pepper, the humanoid robot that Softbank has been developing to assist school children with their homework and to help the elderly. Analysts estimate that the market for business and consumer robots will average $.5 billion by 2019. The increase will be heavily facilitated by the shift towards office and household applications. The robotics division has currently placed most of its focus on industrial applications.
According to Alibaba’s spokesperson, the robotics industry will continue to grow especially as technology continues to advance. The demand for connected and smart living in line with smart technology will be one of the major drivers for the robotics industry. Alibaba’s investment strategy has been in line with taking advantage of the emerging and trending technologies and innovations.The e-commerce company has also been leaning more towards activities that empower its massive ecosystem. The company’s decision to venture into the robotics division is to gain more ground to achieve its objectives.
Alibaba Group Holding Ltd (NYSE:BABA), Softbank, and Foxconn might collaborate to double the operating units from 200,000 to 400,000 by 2017. According to the International Federation of Robotics, China surpassed the United States as the world’s biggest market for industrial robots in 2013. However, the industry has not reached its potential mostly because the consumer market has not fully embraced it. Softbank has already launched Pepper in some of its mobile stores in Japan. The robot is sold at a fair price of $1,600. The company plans to introduce the robot into the U.S.