You're likely aware that robots -- once the sole domain of futuristic cartoons, films, and literature -- are exploding onto the scene. While a Jetsons-like Rosie, who will do all your housekeeping, isn't here yet, iRobot (NASDAQ:IRBT) makes task-specific cleaning bots that will vacuum your carpets, among other things. Humanoid robots that will save the world from the baddies aren't here yet, either; however, Google's (NASDAQ:GOOGL) Atlas, which it acquired when it snatched up Boston Dynamics last month, can perform some impressive tasks, such as climbing ladders, with operator assistance. 

The gadget lover in you might find all this cool, while the investor in you should know four key things if you're considering investing in robotics stocks. 

How are robots generally categorized?
Getting your head around the robotics market will be easier if you know that the market is generally broken down into three categories:

  • Industrial robots.
  • Professional service robots.
  • Consumer robots.
Defense robots -- part of the second category -- are sometimes broken out separately.
Industrial robots have been used in factory automation since their introduction in the late 1960s, so this category is quite mature. Like most things technological, however, factory bots are getting more advanced.
Some robots within the professional service category, notably defense-related ones, have been around for awhile, while others, such as telepresence robots for the health-care industry, are quite new.

Google's robots might eventually be joining the service robots category. Google hasn't said much about what it plans to do with its growing army of robots -- it acquired eight robotics companies last year, most notably Boston Dynamics and Schaft, which make the most advanced humanoid robots this side of the silver screen. However, there's buzz that Google intends to use them in its delivery service. This makes sense, as there seems to be considerable synergy between robots and Google's nascent delivery service, its Uber car service company acquired last summer, and its driverless-vehicle efforts. 

Overall, the consumer robotics market -- which includes robots used for domestic tasks and entertainment -- is the newest. 

What's the size of the robotics market?
The size of the market depends on how we define "robotics." If we're talking about just hardware, the overall market is about $13.1 billion. 

About $8.5 billion is a good consensus figure for sales of industrial robots in 2012. However, when the costs of software and engineering systems are tacked on, that number jumps to $26 billion, according to the International Federation of Robotics. The IFR estimates that the professional service robots and consumer robots generated sales of $3.4 billion and $1.2 billion, respectively, in 2012. 

Robotics Market

Source: Data from International Federation of Robotics.

What's the projected growth of the robotics market?
The IFR projects the industrial robotics market will grow about 6% annually through 2017. 

There doesn't seem to be a good consensus estimate for growth in the other robotics markets. However, the general view is that the non-defense portion of the professional service market and the consumer market will experience faster growth than the industrial market. Growth in the consumer market is projected to be especially strong. Once this nascent market reaches a tipping point, growth should kick into high gear. 

How many pure-play robotics companies trade on a major U.S. stock exchange?
I know of five (there could be more) pure-play robotics companies that trade on a major U.S. exchange: iRobot, Intuitive Surgical (NASDAQ:ISRG)Adept Technology, Hansen Medical, and Mazor Robotics. (MAKO Surgical was recently acquired by Stryker.)

This is an eclectic bunch with respect to type of robots produced, as well as company size and profitability.

If you want to invest only in companies that are currently profitable, you can shorten this list to two companies: iRobot and Intuitive Surgical, which have market caps of $1.1 billion and $16.0 billion, respectively.

iRobot is best known for its Roomba vacuuming robot, though it also makes other cleaning bots for consumers, as well as robots for defense and commercial applications. It's best considered a consumer robotics play, as its home segment accounted for 88.5% of its $61.1 million in revenue generated through the first nine months of 2013, with defense kicking in 9.3%. The nascent commercial products -- telepresence and videoconferencing assistance bots, primarily targeted to the health-care industry -- didn't contribute meaningfully to revenue and aren't expected to until 2015. 

iRobot is the only consumer play among the bunch (and, per my knowledge, among all publicly traded companies, regardless of stock exchange). The stock returned 85% in 2013, though the lion's share to the entire return was due to investors who bid up the valuation of the stock

Turning from mundane cleaning to highly skilled work -- surgery. Intuitive Surgical's da Vinci surgical systems work by translating a surgeon's natural hand movements on instrument controls at a console into corresponding movements of instruments positioned inside patients.  

This leader in robotic-assisted, minimally invasive surgery has been beset by a series of challenges lately, such as product recalls, a warning letter from the FDA, and questions about the efficacy of its systems. Intuitive Surgical posted strong results in 2012, with revenue and net income up 25% and more than 32%, respectively. However, its results for the first three quarters of 2013 have been adversely affected by moderating growth of benign gynecologic surgical systems, and changing hospital capital spending priorities because of the implementation of the Affordable Care Act. 

Intuitive Surgical is slated to report fourth-quarter and full-year results on Jan. 23. Investors should home in on company-specific variables affecting growth. The impact of the ACA on hospital capital spending is out of the company's (and its robots') hands, and will likely be a shorter-term challenge.

The three companies that are unprofitable are small, which presents additional volatility. Adept makes industrial robots, while Hansen and Mazor make medical and surgical robotic systems. Look for some coverage of one or more of these companies -- as well as some potentially interesting non-pure-play robotics stocks -- in future articles. 

You may want to check out Part 2, "3 More Key Things You Should Know About Robotics," which covers select non-pure-play robotics stocks.

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Fool contributor Beth McKenna has no position in any stocks mentioned. The Motley Fool recommends Google, Intuitive Surgical, and iRobot and owns shares of Google and Intuitive Surgical. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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