Analysis

Household robots are the ultimate upgradeable consumer good: Don Pittis

Computers, flat-screen TVs and portable cellphones force consumers to keep upgrading — up to a point. Just wait till Amazon and its competitors get on the robot upgrade cycle.

Amazon's rumoured robots could be the next and long-lasting economic driver

Don Pittis · CBC News ·
If Amazon and its competitors can get get consumers to buy their first household robot and if the ultimate device is like the ones on Westworld then just think of all the upgrades. (HBO)

For the economy, the great thing about the portable telephone was that it was a gift that kept giving. 

The first brick-sized device that I used as a reporter in Hong Kong was a money spinner, but that was just the beginning.

In the more than 30 years since, mobile phones have kept getting smaller and smarter, creating a seemingly endless cycle that practically forced self-respecting consumers to keep buying a new one. But there are signs that economic cycle may be coming to an end.

Top-secret robot

Just in the nick of time, here comes the household robot.

"Amazon.com Inc. is working on another big bet: robots for the home," say technology reporters at the business news service Bloomberg.

Calling it a top-secret project, the report is thin on the capabilities of Amazon's latest planned consumer product, code-named Vesta. Some speculate that at first it may be little more than the company's Alexa virtual assistant with the added ability of following you around the house.A Lynx robot, made by the Chinese company UBTECH, integrated with the Amazon Alexa at the Consumer Electronic Show in Las Vegas last year. What would it take to get you to invite a robot into your home? (Rick Wilking/Reuters)

Perhaps the device — that will reportedly be tested in Amazon employees' homes by year end — will be able to perform basic chores or act as a mobile companion.

But that's just the first iteration. If Amazon manages to convince us to bring household robots into the home, the important thing is not the initial version, it is the long stream of future upgrades.

Rather than robot slaves as we've seen in HBO's Westworld and the Bladerunner movies, consumers will become slaves to buying the latest robot.

The upgrade trap

According to some analysis, the very best consumer product is one that is addictive. Opium and tobacco have been lucrative; the customers keep coming back for more.

The psychological need to have the next great consumer good has also proved to be great way to keep consumers shelling out. It is a subject that has been well studied.   

"The greater the gap between the incremental benefit of the upgrade and its hindrances, the greater the probability that the consumer will upgrade within a given month," said a Stanford Business report on what it is that makes us want to buy the next model.

Humans who could afford to do so have long been slaves to fashion. But the introduction and upgrading of new consumer electronics where this year's model knocked the socks off of last year's, has cleverly appealed to both fashion and function. It takes a lesson from the automobile trade both in creating and satisfying a popular need.

Personal computers, laptops, flat-screen TVs and now, possibly, mobile phones have gone through the cycle from the point where the latest version was a must-have, to where people don't want to pay for small incremental improvements.

Getting a 5G smartphone, for example, may not feel worth the outlay of another thousand dollars.

Technological driver 

At the development stage, when everybody wants one, new products are a technological and economic driver, leading to leaps in innovation and high-paying jobs as companies compete to make each upgrade indispensable.

But just as most people became content with their existing flat TVs when they grew to 40 or 50 diagonal inches, at some point even tumbling prices are not enough to convince us to get out there and buy the slightly bigger, slightly better model.Industrial robots such as this welder at Alfield Industries in Vaughan, Ont., have done the heavy lifting in robot technology. (Fred Thornhill/Reuters)

Robots are now a staple of industrial production. Rich countries where labour is expensive lead the way, but even China with its vast population of workers is switching to cheap, reliable robots.

According to the International Federation of Robotics, industrial robot density in 2017 was 74 for every 10,000 workers and growing strongly.

A robot for every cat

While companies funded by industry and the military often do the heavy lifting in early tech, just as we've seen with computers and smartphones, the move into popular consumer robots will transform the technology into something even more useful and accessible. If Amazon can convince us we need a personal robot the way we needed personal computers and personal smartphones, robot density would begin to soar.

That's a big if. So far Roomba, the hockey-puck-shaped robot vacuum cleaner — famous on the internet as a moving perch for cats — is the only home Robot that is both useful and has sold well. Sony and the South Korean company LG have both tried to sell household robots, but so far they are far from commercial takeoff.
The involvement of Amazon may be a turning point. If the company is seriously thinking of getting into the business, they must imagine they could create a robot that will satisfy some household needs.

"Advances in computer vision technology, cameras, artificial intelligence and voice activation help make it feasible for Amazon to bring its robot to the marketplace," say the Bloomberg reporters.

But if Amazon can convince early adopters that Vesta really is a useful upgrade from the company's electronic personal assistant — effectively a robot you can talk to and more — the potential stream of future economic activity will be enormous.

Maybe Amazon will not be the one to popularize the personal robot. But whoever does, unlike the flat screen TV or even a smartphone, the potential for incremental improvements will be enormous.

The process of moving from a household robot that can greet you at the door, chat and play your music to something as futuristic as what you see in HBO's Westworld is a curve much steeper than for previous consumer products. It will make for a very long stream of increments. 

The hard part for Amazon, will be getting Vesta's first foot in the door.

Follow Don on Twitter @don_pittis

About the Author

Don Pittis

Business columnist

Don Pittis was a forest firefighter and a ranger in Canada's High Arctic islands. After moving into journalism, he was principal business reporter for Radio Television Hong Kong before the handover to China. He has produced and reported for the CBC in Saskatchewan and Toronto and the BBC in London. He is currently senior producer at CBC's business unit.

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