Market Potential of Exoskeletons For People With Disabilities
Market potential for a new product is important to understand, because if the market potential is attractive enough, it will draw many competitors into the battle. A large market with many competitors usually attracts lots of investment and talent and can experience very rapid development.
We will make some very rough assumptions about the market for exoskeletons in order to get an initial estimate of the market potential and the rate at which this market will develop.
To estimate market potential of exoskeletons for people with disabilities we will need to make 3 key assumptions:
Population
We can make a rough estimation of the total population for exoskeletons for people with disabilities by estimating the number of wheelchair users in developed countries. Of course this underestimates the total population because the exoskeletons will also be used by people in non-developed countries as well by people who do not use wheelchairs, for example people who have mobility disorders but can also rely on crutches for mobility. But the use of exoskeletons in these populations is likely to be much smaller and can initially be ignored to simplify the estimation. Also, exoskeletons will be purchased for institutional use by rehabilitation clinics, physical therapy units and perhaps nursing homes. Initially, as the price of exoskeletons will be so high, institutions will be almost the exclusive buyers. However, institutions worldwide will number in the thousands, much less than wheelchair users, and for this initial estimate they can be excluded.
The population of the developed countries is in excess of 1 Billion. Some estimates are as high as 1.2 Billion. But we will take a conservative estimate of 1 Billion for this calculation. Recent estimates for the percentage of the population that uses wheelchairs is approximately 1% and due to the aging of the population, it is rapidly growing. This means that the total population of wheelchair users in developed countries is at least 10 million.
Market Penetration
The market penetraion, or the percentage of people who buy the product, will vary through out the life time of the product and is probably the most difficult to estimate. To properly estimate market penetration, we would need to make an expensive market research. However, let's make some very rough assumptions. Initially, when exoskeletons cost over $100,000 per unit, very few will buy them and as mentioned, initial sales will only be to institutions. But as the price drops the market penetration will increase. Market penetration is unlikely to reach 100% or even 50%. However, market penetration between 1% - 10% or even more is reasonable. Certainly it is not hard to imagine that if the price were low enough, at least 1% of wheelchair users would like to walk. Even 10% is probably too low, but let's assume these two values as a reasonable maximum and a minimum for this rough estimation.
Price
Initial estimates of price are in excess of $100,000, far above the price that most people will be able to afford. However, as the technology improves and competition increases, prices are certain to drop to a range where more people can afford them. What can people afford? People with disabilities are now buying power wheelchairs and accessible vans. Sometimes they finance these products individually, sometimes they buy them with the help of governmental or private insurance and sometimes with the help of charities or other organizations. Power wheelchairs cost around $10,000 and accessible vans cost around $50,000. Lets assume these two prices for a maximum and a minimum for this estimate.
Market Potential of Exoskeletons For People With Disabilities
Market potential is Population X Penetration X Price
Now let's use the numbers discussed above to make some sense of thisMinimum market potential for exoskeletons for wheelchair users:
10 million x 1% x $10,000= $1 Billion
Maximum market potential for exoskeletons for wheelchair users: 10 million x 10% x $50,000 = $50 Billion
By this estimation, the market potential is between $1- $50 Billion. The actual market potential probably lies between these two numbers, but certainly not less than $1 Billion. Since we have excluded non-developed markets, institutions and non-wheelchair users, the market potential is probably towards the upper level of this range or perhaps even higher.
How Attractive Is The Market OF Exoskeletons For Wheelchair Users?
The authors of this article estimated that in the mid to late 1990's the US power wheelchair market was between $24-140 million and the US mobility scooter market was between $129 and $154 million. As the US population is approximately 1/3 of the developed world, we can estimate that the market for power wheelchairs and mobility scooters in the developed world was under $500 million just over one decade ago.
The market for exoskeletons will be at least twice, but more likely, many times that size. Even with these rough estimations it is clear to see that the market for exoskeletons is a very attractive market.
Of the four companies with leading exoskeletons for wheelchair users, all are start-ups with just a few employees and a few million dollars of investments. If one of these start-ups were to take a significant share of this market, it will rapidly begin to generate sales in the hundreds of millions of dollars turning the company from a start-up to a giant almost overnight. A significant share of those sales will be reinvested into research and development in order to produce newer, better and cheaper exoskeletons. We can therefore expect to see very rapid development of exoskeletons for wheelchair users.
