When SoftBank Group Corp CEO Masayoshi Son unveiled the wide-eyed android Pepper in 2014, he painted a vision of a new era of personal robots in which his company would be the industry leader that had previously been confined to science fiction.
According to two sources familiar with the situation, that vision, as well as the company’s expectations for Pepper demand, proved overly optimistic. Pepper is still clinging to life seven years later, with production halted and units cobbled together with obsolete components.
According to the minutes of an internal meeting held in Paris in late May, SoftBank will stop selling new Pepper units in 2023 at the latest, as those parts become obsolete. Management informed employees that sales of refurbished units would continue after this point.
The company disputed the meeting minutes, and Kazutaka Hasumi, SoftBank Robotics’ chief marketing officer, told reporters that the company is committed to ensuring Pepper’s survival in some form, possibly with a new design.
Aldebaran, a French robotics startup that SoftBank acquired in 2012, created the humanoid specifically for the company. Son hoped that Pepper would transform robots from factory tools to everyday companions, similar to how computers had transitioned from offices to homes and pockets.
However, Pepper’s appeal was limited by its basic functionality: it can hold rudimentary conversations, interact with its chest-mounted tablet, and sing while gesticulating. According to the two sources, it would frequently break down.
Pepper, which retailed for 198,000 yen ($1,800) plus a monthly fee of 14,800 yen, was out of reach for most households, and SoftBank was quickly forced to focus on businesses. Pepper was met with some early enthusiasm in that industry; shops and restaurants provided a more predictable environment in which the robot could be programmed for tasks such as greeting customers.
However, poor relations between Tokyo and Paris hampered Pepper’s development, according to two sources familiar with the situation. Because they were not permitted to speak to the media, all of the sources spoke on the condition of anonymity.
According to two of the sources, SoftBank boosted Pepper’s sales in the early days by deploying units in its mobile phone stores. According to one of the two sources familiar with the situation, 27,000 units were eventually produced.
According to the documents, production at a Foxconn factory in China was halted last year due to an increase in the number of unsold units, and the line has since been shut down.
According to the documents, SoftBank has fewer than 2,000 Pepper units left. According to one of the sources, the heavy batteries that power the robot are deteriorating, and the chest-mounted tablets are running on an out-of-date Android operating system that lacks the most recent security updates. The billionaire is also a hitmaker, having famously brought Apple’s first iPhone to the Japanese market. However, his company had little experience designing and building products, let alone androids, when it launched Pepper.
And the anticipated market did not materialize. Even as Pepper spread SoftBank’s name around the world, some customers returned it when their leases expired.
SoftBank launched Whiz, an automated vacuum cleaner, two years ago in an attempt to reboot its robotics business.
According to two other sources, sales staff struggled to persuade customers to pay $500 per month for a product that could only clean open spaces and would break down. The pandemic has increased demand for Whiz, with orders for 8,000 units placed in the April-June quarter, according to Kenichi Yoshida, chief business officer at SoftBank Robotics.
According to the two sources, SoftBank has considered other robot products, including one that makes ramen. It sells Servi, a food service robot developed by California-based Bear Robotics that can deliver food to diners.
SoftBank Robotics’ underperformance reached a climax last year when the downturn forced Son to change strategy, selling assets to stabilize the group’s balance sheet and pressuring portfolio companies to prioritize cash generation. Yoshida stated that the company is nearing profitability and that listing is a possibility.
Through its Vision Fund, the conglomerate has shifted to pure investing, selling majority stakes in companies such as Boston Dynamics. It continues to invest in robotics-related businesses on a smaller scale.
SoftBank has signed sales agreements with partners such as Iris Ohyama in Japan and RobotLAB in the United States. According to Elad Inbar, CEO of RobotLAB, there is a niche market for selling Pepper to corporate clients and in education.
