{"id":1330,"date":"2015-12-05T18:51:45","date_gmt":"2015-12-05T23:51:45","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/softbank-robotics-worlds-first-consumer-humanoid-robot-pepper\/"},"modified":"2015-12-05T19:15:35","modified_gmt":"2015-12-06T00:15:35","slug":"softbank-robotics-worlds-first-consumer-humanoid-robot-pepper","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/softbank-robotics-worlds-first-consumer-humanoid-robot-pepper\/","title":{"rendered":"Softbank Robotics \u2013 World\u2019s First Consumer Humanoid Robot \u201cPepper\u201d"},"content":{"rendered":"

 <\/p>\n

Softbank Robotics introducing Pepper<\/u><\/strong><\/em><\/p>\n

\u201cSold Out\u201d. 10:00 AM on June 20th, 2015, Softbank Robotics released its first wireless humanoid robot on earth in its website \u2013 and at 10:01 AM, registration closed. 1,000 robots were sold out in less than one minute. Here I would like to introduce Softbank Robotics \u201cPepper\u201d, as one of the most effective early stage business model in the world.<\/em><\/p>\n

Softbank unveiled \u201cPepper\u201d in 2014, the first revolutionary wireless connected humanoid robot for consumers. Softbank Robotics was established in 1st<\/sup> of August 2014 as a 100% subsidiary of Softbank Group to solely focus on Pepper business. Pepper is a communication robot. It intends to pull out demand for communication, entertainment, and promotion. Although the ability to communicate with the human is still limited, Pepper can interact with people through its vocal communication, physical gesture, and 10.1-inch display.<\/em><\/p>\n

[Linked to introduction video]\"01\"<\/a><\/em><\/p>\n

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Business model<\/u><\/strong><\/em><\/p>\n

To attract consumers and generate profitable business, Softbank Robotics effectively leveraged its product strength, creators community, and subscription model of Softbank group telecom business.<\/em><\/p>\n

 <\/p>\n


\n(1) Subscription business<\/em><\/p>\n

Softbank\u2019s breakthrough against consumer\"03\"s\u2019 negative perception to <\/em>pricy robots was brought by implementation of mobile subscription model. Already one of the most famous and successful company in Japan, Softbank shrewdly announced its product for the insane price of approximately $1,650 which shocked the media and Japanese for its insanely low pricing. <\/em><\/p>\n

 <\/p>\n

(Currency 1USD = 120 Yen)<\/p>\n

In reality, including the mandatory 36 months subscription and maintenance fee, the total cost accumulates up to $10,000\u00a0in a long\u00a0term. Still, consumers were attracted to Pepper because of its low purchase cost.<\/em><\/p>\n

 <\/p>\n

 <\/p>\n

(2) Robot creator community\"04\"<\/em><\/p>\n

Softbank Robotics successfully nurtured \u201crobot creator\u201d community that creates the ecosystem of Pepper users. Just as Threadless created T-shirt designer community, the community worked as gaining retention and attraction of both existing users as well as newcomers.<\/em><\/p>\n

To generate long-lasting community, Softbank tirelessly launched \u201cPepper Creator Certification\u201d in order to authorize qualified creators. In addition, it opened \u201cPepper Pioneer Club\u201d who will gain benefit to sell robotics app which will be opened soon. To incentivize competition, Softbank continuously hold \u201cPepper\u2019s Creator\u2019s Contest\u201d and reward those who made interesting apps.<\/em><\/p>\n

 <\/p>\n

 <\/p>\n

\u200e<\/u><\/strong>(3) Softbank group synergy\"05\"<\/em><\/p>\n

Unlike other robotics ventures which often struggle with promotion, Softbank Robotics successfully managed to save sales and promotion cost through utilizing business asset of Softbank mobile. Using Softbank group\u2019s mobile phone store network all over Japan, Softbank Robotics provided the demonstration of Pepper at each of Softbank stores. Also, they bundled Pepper promotion in line with mobile service advertisement – thereby minimizing the cost of promoting innovation\u200e while maximizing existing promotion channel.<\/em><\/p>\n

 <\/p>\n

 <\/p>\n

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 <\/p>\n

Operational model<\/u><\/strong><\/em><\/p>\n

(1)\u00a0\u00a0 Mass production and wireless function\"06\"<\/em><\/p>\n

Outsourcing production of Pepper was a key success factor to transform a dog into the cash cow. Softbank outsourced the manufacture of Pepper to Foxconn, the world\u2019s largest EMS (Electronics Manufacturing Service) based in Taiwan, a drastic change from its high-cost production in Aldebaran, France, where it held \u201cjob shop\u201d production model.<\/em><\/p>\n

Through drastic outsourcing, Softbank Robotics drastically changed its cost structure within a year. Especially, it (a) lowered labor costs compared to the previous factory in Aldebaran, (b) utilized line production knowledge that Foxconn accumulated through electronics manufacturing, and (c) minimized procurement costs of robot parts by use of bargaining power and bulk purchase.<\/em><\/p>\n

Moreover, Pepper embedded wireless connection as a default function. This enabled Softbank Robotics to start with a monthly subscription business model from the start.<\/em><\/p>\n

 <\/p>\n

 <\/p>\n

(2)\u00a0\u00a0\u00a0 Software integration of intellectual propertie\"07\"s<\/em><\/p>\n

For all Pepper owners, online-accessible SDK platform is provided. Robotics apps may be created through SDK to create the wide range of application from simple movements to advanced customization using widely available languages. To assist beginner creators, SDK education programs are provided by Softbank Robotics, which was called \u201cAldebaran Atelier\u201d for all robot creators with no charge.<\/em><\/p>\n

 <\/p>\n

 <\/p>\n

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 <\/p>\n

Alignment with operating and business model<\/u><\/strong><\/em><\/p>\n

Through effective alignment between business model and business model, Softbank Robotics seems to make ecosystem that enables long lasting business.<\/em><\/p>\n

\"08\"<\/em><\/p>\n

 <\/p>\n

 <\/p>\n

Although the disclosure is limited because Softbank Robotics is a private company, Softbank Robotics has been able to keep its zero inventory since its start of Pepper introduction. Moreover, rumors tell that Pepper business already exceeded the breakeven cost for their variable costs, and partly covered fix costs.<\/em><\/p>\n

\"09\"<\/a><\/em><\/p>\n

 <\/p>\n

Furthermore, Softbank already took a footsteps into global expansion. On June 18, 2015, Softbank publicly announced that it will expand Pepper sales in collaboration with Alibaba and Honhai. Moreover, as Softbank owns Sprint, introduction to Sprint stores in US is now discussed internally. Be prepared to see Pepper robot in Sprint shop soon!<\/em><\/p>\n

 <\/p>\n

\"pepper-robot-100592636-primary.idge\"<\/a><\/p>\n

[Source]<\/em><\/p>\n

http:\/\/www.softbank.jp\/<\/em><\/p>\n

Most of source based on interview from Softbank Robotics employees<\/em><\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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