Illinois-headquartered Zebra Technologies is reportedly winding down its 2021 acquisition, autonomous mobile robot (AMR) manufacturer Fetch Robotics, in what some are calling a “cautionary tale” for those working in the heavily populated AMR space.

While not confirming Fetch Robotics will close, a spokesperson for Zebra Technologies says the company has decided “to explore strategic options for our robotics automation business”. 

“This move will enable Zebra to further sharpen our strategic focus on digitizing and automating frontline workflows and on our investments in key growth areas,” the spokesperson continues. 

“Long term, we will continue to provide solutions that empower organizations to increase productivity, optimize inventory, and better serve consumers and patients across the industries we serve.”

Zebra technology announced in July 2021, it was accelerating its growth in “intelligent industrial automation as part of the company’s focus on robotics in customer-centric solutions” with the acquisition of Fetch Robotics.

Zebra technologies paid USD290 million to acquire the 95% of the company it did not already own.

Warehouse automation and AI consultant Ben Angel on LinkedIn, states the unwinding by Zebra Technologies is “a cautionary tale for automation customers navigating an increasingly crowded vendor landscape where many suppliers lack deep expertise in integrating robotics into real warehouse operations”.

“This case highlights commoditization, unproven productivity and ROI claims, vendor lock-in risks, and why many automation deployments struggle to meet expectations,” Angel states.

“It also shows how difficult it has become to compete in AMR segments…It also reinforces a simple lesson for future customers: automation decisions should start with software architecture, not robots.”

Ash Sharpe, VP of research at Interact Analysis says Fetch Robotics was acquired for “nearly 30 times its annual revenue, despite likely operating at a loss”.

“Other companies adopted similar strategies, paying exceptionally high valuations to secure a share of this fast-growing sector,” Sharpe notes. “For example, ABB Robotics acquired Spanish firm ASTI, and Teradyne purchased Mobile Industrial Robots. All three have faced challenges integrating and scaling these startups, leading to divestments or significant reductions in investment.”

Sharpe says the AMR industry now exceeds USD4 billion annually and is growing at a double-digit rate. He adds there is a common misconception in the market this represents “a single addressable market for any vendor”.

“In reality, the industry comprises multiple segments, each requiring specific AMR form factors tailored to distinct workflows,” Sharpe continues. “The segment targeted by Zebra through Fetch’s technology was worth only a few hundred million dollars.”

Speaking to Forkliftaction at MODEX 2018, Mark Wheeler, director of supply chain solutions at Zebra Technologies, explained one of the main challenges for automation in the warehousing sector, is learning how and when to leverage autonomous mobile materials handling solutions.

“It takes between four and five weeks on average to bring a new employee fully up to speed. And this time is getting longer not shorter,” he says.

“Zebra, through its acquisition of Fetch Robotics, offers a broad portfolio of autonomous mobile robots (AMRs) which can safely and quickly navigate through the facility to move materials and operate across three shifts. 

“Customers are learning about the capabilities of these solutions and where they can make an impact from receiving through shipping in a variety of use cases.”

The Robot Report says sources have indicated most of the staff at Fetch Robotics will be laid off before the end of this year with around 25% staying until March 2026 to manage current deployments.

“The future of the robots in customer sites now likely appears tied to whether Zebra can sell the group to a new owner,” The Robot Report continues. “Zebra didn’t break out the AMR group’s revenue separately in earnings reports, so it’s unclear how many robots are in the field or how much revenue the division made at Zebra.”

Sharpe from Interact Analysis says the greatest challenge ahead for the AMR market is the scaling of operations.

“Five years ago, most AMRs were sold to small organisations purchasing only a handful of robots,” Sharpe continues. “This fragmented customer base made scaling difficult for companies lacking broad distribution and sales networks. 

“Mobile industrial robots grew rapidly during this period. However, the market has since evolved. While small customers remain, most AMR volume now comes from major retailers and 3PLs, which deploy hundreds of robots per site and thousands across networks. Their requirements and procurement processes differ significantly from early adopters, demanding a fundamentally different approach to achieve scale.”