Morgan Stanley: Except for reducers, all robot hardware can be independently developed—the core barrier is shifting to software and data.

Morgan Stanley: Except for reducers, all robot hardware can be independently developed—the core barrier is shifting to software and data.

The competitive landscape of the robotics industry is being reshaped. The widespread manufacturability of hardware is pushing the real moat towards software algorithms, data accumulation, and ecosystem building.

According to information from Wind Chasing Trading Desk, a memo released by Morgan Stanley on November 23 states that during the Asia-Pacific Summit, the bank communicated with several robotics companies including Geek+, UBTECH, and DOBOT. Feedback from the meeting showed that global investors remain highly interested in the robotics sector, but the focus within the industry has shifted.

Industry participants are increasingly reaching a consensus: Software will be the key differentiator deciding the future competitive landscape. The companies at the meeting generally emphasized that, aside from a few precision components such as reducers, most hardware is now capable of being self-developed.

Self-developed hardware becomes a trend, reducer remains the only exception

According to the Morgan Stanley report, independent research and development of robotics hardware has become a mainstream trend in the industry. At the summit, most robotics integrators highlighted their ability to develop internal components and efforts to build their own ecosystems. This indicates that technical barriers in the manufacturing segment of robot hardware are gradually being broken.

However, a key exception is the reducer. The report clearly states that the reducer is the only core component consistently mentioned by companies at the summit as one that needs to be purchased externally.

This shift places new demands on investor assessment of robotics companies. Attention in the market is moving from pure hardware manufacturing capabilities to a focus on companies’ strengths in software development, data training, and building efficient ecosystems.

Software and data: the new core battlefield

If hardware is the “body” of the robot, then software and data are its “brain” and “soul.” The report emphasizes that software is expected to become the most core competitive advantage in the robotics industry.

Participants generally believe that data availability for robot training is a common challenge faced by the entire industry. Whoever can master more high-quality scenario data and develop superior algorithmic models will stand out in the intense market competition. This viewpoint implies that the core value of future robotics companies will be more reflected in their software capabilities and data processing abilities, rather than hardware assembly.

Return on Investment (ROI) prevails over morphology debate

In the field of industrial applications, discussion of robot morphology is giving way to a more pragmatic indicator: return on investment (ROI). Industry participants increasingly agree that in factories and warehouses, the robots’ appearance (whether humanoid or other forms) is far less important than the actual benefits they deliver.

The report notes that the key factors driving ROI are efficiency, accuracy, and cost. Whether a robot can be broadly adopted ultimately depends on its ability to create quantifiable economic value for customers. This consensus reminds investors that when evaluating industrial robotics companies, they should pay closer attention to the product’s real-world application performance and customer cases, rather than just technological concepts or morphological novelty.

Humanoid robots: Startups set aggressive targets, industry applications remain cautious

For the much-watched track of humanoid robots, the market presents a mixed picture. Morgan Stanley has observed that emerging startups are setting extremely aggressive targets for next year, while established companies extending existing businesses into humanoid robots are relatively cautious.

The main growth points for startups are focused on entertainment, R&D, and sales services. For example, EngineAI expects to deliver 300 units in 2025, rising to 3,000 units in 2026.

In comparison, implementation in the industrial sector is more cautious. UBTECH is a notable exception, expecting to deliver 500 units in 2025 and 2,000 to 3,000 units in 2026, primarily targeting industrial applications.

 

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