Sudden, unexpected demise of Rethink Robotics shakes up automation industry

So long, Baxter ol' buddy. Rethink's pioneering collaborative robots helped create a new automation category. Here's why it failed.

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Boston-based Rethink Robotics, one of a handful of pioneering companies that led the charge to move industrial robots out of cages and alongside human workers, announced Wednesday it was ceasing operations. The news was largely unexpected and has sent shock waves through the robotics industry, where Rethink has been held up as a model of the new industrial automation paradigm.

The Boston Globe is reporting that Rethink was in the final stages of a deal to stave off closure by selling itself to an unnamed buyer. Ultimately, that deal fell through and the robotics firm had no alternative but shut its doors.

CEO Scott Eckert says the company ran perilously low on cash. In the wake of the announcement, close to 100 people are without jobs.

I reached out to a couple industry insiders to glean perspectives on what the closure means. In particular, I wanted to know whether the closing of Rethink suggests the current market for collaborative automation has been over-stated.

"I think not," John Santagate, Research Director in Service Robots for IDC, told me. "I think it is more a function of the risk of being a pioneer in a new space."

Elaborating, Santagate added, "Rethink helped create the market for collaborative robots that are safe, easy to use, and extremely flexible. But when they entered the market they made a splash, and other more established robotics vendors took notice and came out with their own collaborative robots. Companies like ABB, Yaskawa, Kuka, and Fanuc have extended their portfolios to include user friendly, highly capable, and very flexible collaborative robots."

Even so, given the strength of the robotics industry generally and the industrial automation sector in particular, the closure has left many dazed.

The recent folding of Mayfield Robotics, maker of a home assistant called Kuri, was easier to explain given general uncertainty in the nascent home robotics sector, which has yet to find its footing. But international sales of collaborative robots have been rising quickly over the past couple years. Forecasts predict the market, which didn't exist a decade ago, to reach $13 billion by 2025. Collaborative robots are expected to compose a full 34 percent of all industrial robot sales in the same timeframe.

The likely culprits of Rethink's demise, then, were market mismatch and stiff competition. Danish firm Universal Robots is the dominant player in the collaborative robotics space, with a roughly 60 percent market share.

"Rethink was an important leader in the collaborative robotics conversation," Peter Harris, CEO of HighRes Biosolutions, told me, "However, while Baxter brought much attention to the idea of robots and people working side by side, it was never a truly viable alternative to Universal or other mainline cobot makers in most applications."

Rethink's Baxter and Sawyer robots, while congenial and easy to love, proved tough sells in the cobot market.

"Part of the lesson here may in fact be that the long term winners will be more about the entire robot portfolio and ecosystem rather than just one or two configurations," says Harris.

In the end, this may be a tale of a promising company that put too many eggs in too few hardware baskets.

"What really sets the leading robotic arm vendors apart is the variety of robotic arms that they offer," IDC's Santagate says. "Having the wider portfolio in terms of size, payload, and other features makes it more likely to find an appropriate solution that is best fit."

He contrasts that to Rethink's model, which tried to force two robotic platforms, Baxter and Sawyer, to fit a wide variety of use cases.

In the end, the explanation doesn't relieve the sting. A promising, influential robotics company has collapsed. The industry is still processing.