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Alibaba Group Holding Ltd (BABA) and Foxconn to Launch SoftBank’s Pepper Globally

Remember Rosie, the household robot, from the popular American animated sitcom The Jetsons? Well, it appears that owning a similar robot might not be such a distant dream after all.

According to The Wall Street Journal, three of Asia’s top tech executives – Alibaba Group Holding Ltd (NYSE:BABA)’s Jack Ma, Foxconn Technology Group’s Terry Gou and SoftBank Robotics Holdings’ Masayoshi Son — are collaborating to make SoftBank’s robot – Pepper – available worldwide.

The Alliance

The Chinese e-Commerce giant Alibaba is joining forces with Taiwanese electronics manufacturer Foxconn (Apple Inc.’s main manufacturer in China) to invest in SoftBank Group’s robotics business. SoftBank Robotics Holdings is the robotics unit of Japanese communications giant, SoftBank Group.

According to a joint statement released on Thursday by the three companies, Alibaba and Foxconn will invest about $117.8 million each in SoftBank’s robotics business. Alibaba and Foxconn will hold 20% of the venture each, with SoftBank Robotics holding the remainder.

Hello Pepper!

About a year back, Son introduced the asexual 1.2-metre tall machine – Pepper – which moves around on wheels and wears an iPad as a pendant.

According to the statement, the three companies will unite to bring SoftBank’s Pepper and other robotics businesses to the global markets, with a long-term goal of expanding the robotics industry on a worldwide scale.

Priced at about $1600, SoftBank’s human like robot has been built for taking care of elders, assisting school kids with home assignments and delivering digital entertainment. Pepper will go on sale from Saturday.

Fast Forward to the Future

According to a recent report from BI Intelligence, the global market for consumer and business robots is expected to reach $1.5 billion by 2019, as their usage increases from manufacturing assembly lines to offices and households.

As for Pepper, it is doubtful whether customers would be willing to pay not only the hefty price but also the extra monthly fees of around $200 to use Pepper (including an insurance package).

CEO Ma believes that “Robots are going to be as popular as cars” and “… we all have to get ready for that.” We hope he is right. We all want our Rosies, don’t we!?

Stocks to Consider

Alibaba Group Holding Ltd currently has a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the industry are Petmed Express Inc and Synacor, Inc. Both the stocks carry a Zacks Rank #2 (Buy).

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