Just as the 1970s became known as the decade of the PC, the 2010s may be seen eventually as the decade of the robot.
By combining computer technology with highly precise mechanicals perfected through military research, and by focusing first on high-value niches where money is no object, robotics is going through its mainframe phase and robot makers are achieving success.
Our George Liu calls Intuitive a “charging elephant” because, up until now, it's mainly been limited to a niche market, hysterectomies and prostate surgeries. But now it's won approval for use in a dozen other procedures in the U.S., and globally there are 100 different surgeries where the system is used. Adding revenue, for both ISGI and its customers, is as simple as adding peripherals and getting approval. Just as with Apple (AAPL) or Microsoft (MSFT), the more applications, the more valuable the platform.
A da Vinci robot doesn't replace the doctor. It allows greater accuracy, reducing malpractice and increasing productivity. This has allowed Intuitive to lap many older medical device companies such as Stryker (SYK), Medtronic (MDR) and Boston Scientific (BSX), achieving high and highly-reliable growth rates.
You can expect a lot more robotic start-ups, as technology first developed in the military finds civilian applications. Little companies like RE Squared, which makes robot manipulators (think arms and hands), Ekso Bionics and HDT Robotics are growing fast and some are certain to go public in the next few years.
The Robot Report lists about 200 makers of industrial robot makers worldwide, most of them specializing in factory work. The report's editor, Frank Tobe, likes Intuitive competitor Mako Surgical (MAKO) and iRobot (IRBT), maker of the Roomba floor cleaner, but also expects farm equipment companies John Deere (DE) and Caterpillar (CAT) to pick up the pace with driver-less farm equipment.
The point is Intuitive is not a one-off. When it comes to robotics, watch this space.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.