Let me explain why any surgical robotic company will be number 2 - It’s just mathematics

Steve Bell explains why number 2 in surgical robotics is just maths

I recently ran a small poll on Linked In and asked who people thought would be the number 2 company after Intuitive. And well you can see the results here - with CMR Surgical being the main other, followed by SSi.

My point today is not to just talk about the results that came in and why I think they are potentially right with a few caveats. But I want to answer a lot of comments saying “You assume Intuitive will still be number one! Why?”

This question has popped up a few times over the past two years as I have quoted saying in the next decade Intuitive will most likely still retain the majority of 60% plus of the market share of the surgical robotics space.

Often it gets levelled at me that I’m “Just an Intuitive fan boy.” But that is just not true. I admire them, love their products and un-wavering focus. But that doesn’t mean I’m a blind “Fan boy.”

Instead I’ve just spent the last decade of my life working out sales and implementations and getting surgical robotics programs up and running across the world. I’ve lived with the harsh reality of what it means to get systems sold, implemented and then used.

And I know what it means in absolute numbers when you try to convert that into market share. And how fast anyone could get market share that is meaningful.

What we do need to consider is “share of sales / implementations in any year.” Which is a different measure of market share but often overlooked.

Let me break this down.

So for the sake of simplicity let’s use a number of 11,000 installed da Vinci systems across Xi, DV5 and SP by the end of this year. It’s a nice round number if not 100% accurate.

Also let’s add up all the other systems out there; and it’s about 600 installed robots across all the manufacturers.

So our 2026 starting point will be 11,600 surgical robots - and Intuitive has 11,000 of them which is a nice 95% market share.

And if we did procedures ever done to date it will be 99% of procedures.

If it is revenues - it will be 98% and profit almost 100%.(trust me a lot of people make a lot of loss)

So as a baseline; Intuitive are starting in a very strong position. And let us use the smaller number 95% of installed base. And let us use this for now as the metric of market leadership.

So we now need look at the reality of what it would actually, mathematically mean for a single company to get over 50% market share in fantasy land.

Let’s run the numbers

In this fantasy scenario Intuitive suddenly just decides to not sell another robot and stays at 11,000 installed base.

Plus all competitors cease... and there is just one other company selling robots and they get 100% of all surgical robot sales and they get to 11,001 robots so become “Number 1” and all that happens in 5 years.

Let’s run this bizarre scenario:

So the starting base, let’s say, is 200 system sales by Company X by the end of 2025 out there across the world. So Company X needs to sell 10,801 brand new systems in 5 years to hit the magic 11,001.

That becomes 2,160 systems per year, or a meagre 41.5 systems per week - every week including holidays, between Jan 1st 2026 for 5 years. Or broken down 6 robots per day. Every day, never missing a single robot - ever.

I know this seems “odd” for me to do this - but I get mail after mail saying company X or company Y will pass Intuitive soon. And we all need a reality pill.

1st reality - Most companies have a production capacity of between 200 and 500 systems per year or 5X too small to actually do it. They'd be in back order in months if not weeks.

2nd reality - It assumes that there are 6 systems being bought every single day across the world. No one day does some hospital ever not by a robot - ever again. Madness.

3rd reality - to sell / deliver / implement and train every team - that is 6 teams per day for the next five years with no break ever.

Do you see just how insane to even begin to think this way is.

And if the reality is that Intuitive actually win 90% of tenders / deals globally then they will be adding 1000 robots to that target every year. So in 5 years company X would need to actually sell 16,001 systems to be the “market share number 1”

This one simple mathematical exercise shows that Intuitive cannot be knocked from their number 1 post - so please - all the people saying upcoming companies will beat them… it is fantasy. Stop. And do not beat yourself up with setting such lofty and unrealistic expectations.

What about annual installs as a marker?

Look so absolute installs - absolute procedures ever performed is a non starter as a measure. I mean no one has a time machine to unwind the last 25 years.

Instead, what should be looked at is the go forwards business. In 2026 - you can start to count the number of deals that are possible and look at how many da Vinci vs competitors win those deals (starting the year as a base zero.) Not counting historical installs.

Now this gets more interesting… but…

So let’s imagine Intuitive will sell 1000 systems in 2026.

To date the biggest number I’ve seen by any competitor in one year of sales was… well by my team at CMR where we did over 60 systems in a year. Amazing result BTW.

So that is 60 vs 1000 or 6% of the installs. So not quite hitting 50%…

So let’s run that for our super competitor Company X.

Now to be number 1 they would need to do 1001 sales in 2026. So let’s run that scenario.

1001 systems in 12 months = 83.5 systems per month

Or 19.25 systems per week

Or 2.75 systems per day.

Now even if that number seems crazy - Intuitive are geared up to do that and will do that in 2026. So it is absolutely possible by a company big enough, with enough production, enough training capacity etc etc.

But we have to look at the delta from today. Let me imagine Company X (the best ever) has a run rate of 100 systems per year leaving 2025. On Dec 31st their run rate is 1.9 per week - and that will need to jump 10 X to the 19.25 systems per week in 24 hours. That is just impossible - even for the biggest and best company on the planet. Sorry it just is.

But if they go 2X - to 200 systems a year - it is now 16.6% - decent.

Okay - now we are getting somewhere!!!

My prediction has been for a few years that the next competitor to Intuitive will get circa 15% market share of new installs per year.

Let me be clear that is not 15% of the installs globally including historic. We need a better measure. And for me that better measure is “what % of new robots get sold by Company X?”

If we use this metric - then I predict that the best company can get to say 200 systems sold per year within 5 years. To go from sub 100 to 200 means so many things. But it is feasible and possible.

They still must win 200 competitions against Intuitive, against all the other competitors out there (quotes and tenders). Not easy. Not impossible.

Hospitals (somewhere) must be willing and needing to buy over 1200 new systems that year. These are new installs and if other companies are also winning some - then we might be looking at say 1500 new systems a year - and company X needs to win 200 of them.

Is this reasonable and is it worth it?

Okay I need to run some other maths here and take you on a financial journey of “is it worth it?”

This is complex because it all depends on what “worth it” means to your company. If you are a stand alone surgical robot just reliant upon your sales then you need to look at stand alone financials.

Stand alone sales:

If we do this - we need to look at say $1 Million (the price you might win on against an Xi if you’re lucky).

So on capital alone - 200 X $1 million = $200 million revenue up front.

Plus we then have the $2800 per case (250 cases per year ) = 700K per system per year

Over 200 systems (full year) = another $140 Million

Plus the $20 million (10%) on service revenues

So that one year could equal $360 million of revenues - not bad.

So If I’m a stand alone robotics company in the number 2 position - I’m looking at $360 million revenues at 60% GP = $216 Million profits - and that ain’t a bad earner.

This assumes all capital sold up front for cashola. It starts to look a little more sketchy if part of the $200 million capital is leased and split over 7 years and you carry a lot of that cost on your books.

But over 7 years it’s good dollar all told. (every year you get case money!)

BUT… my little survey sees Medtronic and JNJ up in the number 2 and 3 spots. And that is a different dynamic.

Sales linked to business defence:

As I’ve noted 100 times - the big surgical companies have most to lose as laparoscopy and open surgery moves across to robotic surgery. They lose access devices such as trocars, they lose staplers and energy devices. All high profit and critical areas.

(Other companies lose imaging etc etc) But the big two risk the most.

So for every robot where you can “defend an account” it is not just the value of the robot - it is the value of the business in that account.

If that robot can even convert an account… it has even more value.

An account can be a few million sales $ to defend or win. So every robot there is more valuable to a strategic than to a stand alone robotic company.

When you put it in this context - the picture starts to look very very different.

Yes - the company gets the value of the robot - but any of those companies defending or winning up to 200 major accounts per year!! That is Big !!!

Let’s give an average of $4 million to big account. 200 accounts if won has a plus value of $800 million.

Load that with the $360 from the robot sales and we are now in the financial realms of billions of value over the five year window.

What I’m trying to stress here is that a 15% - 20% market share of new installs is not equivalent to the market share of installed base in so many ways. It is actually more valuable.

Look again - 200 per year for 5 years is 1000 systems of (by five years time) 16,000 plus systems installed.

6% market absolute share. That sounds pretty poor… but it is not.

I’m not being an ass when I say that there are a number 2 and number 3 competitor far behind. You have to look at it in its own right financially.

JNJ and Medtronic - if one gets to 15% - 20% of annual installs... will be adding billions of value per year. And defending their important surgical portfolio - so we must look at “Number 2 in context.”

I hope this clears up that Intuitive will absolutely still be number 1 - by a long long way. But any number 2 or number 3 depending what % of new installs they can capture will matter for them - if not for Intuitive.

What do I think of these results?

Who will be in second place to Intuitive

Never take these polls too seriously but they are indicative of the zeitgeist of the market. Now if I look at this list….

Number 2 = Medtronic

Number 3 = Johnson & Johnson

Number 4 = Microport

Other runners, CMR Surgical, SSi.

My spin on this is that it is probably accurate that the three followers are major corporations. That’s because I feel that a “robot” alone is not enough mass and leverage to win. If a company is using distribution world wide - it will start to struggle on margins at some point as pricing and financing dynamics change.

But it is also about the 360’ infrastructure costs and the bigger corporations have offices open, finance departments running, HR teams in abundance etc. All of those leverage costs are what will determine success and failure. Not just the robot. Building robotic infrastructure is expensive.

So on that basis Medtronic is a beast of a company and can sit in pole position there. And they also actually have a robot on the market now. Remember that we are talking in this pole 5 to 10 years. JNJ does not yet have Ottava available so third place is a “If they get clearances.”

They aim to submit for FDA in Q1 2026 - and then it will take 9 good months at best to get cleared. That leaves 2027 - and only USA.

(But I suspect they are parallel pathing CE and PMDA Japan.)

Still - it ain’t over until, cleared. But the clock ticks for the number 2 slot every day.

But assuming clearance - 2027 - then they will be the second contender. They have six plus years to make up on Medtronic. That is no mean feat. So would they between now and 5 years miraculously over take Medtronic? I doubt it. So number 3 feels right.

Microport in fourth place. Good base in China and having seen first hand their corporation - yes they will be around and will be a likely contender after 2 & 3.

For the others… if any of them (CMR, SSi) get acquired into a big company - then yes they too could be contenders. But that all important clock is ticking. Shelf space is filling up, people are getting used to systems. If big companies want in they need to get in now.

So I think these results are credible - and I think if MDT could get to that 200 Installs a year… it would be a strong second place to Intuitive and is absolutely achievable.

And as said - for JNJ and MDT you must not look at their robot in isolation - you must look in terms of the bigger surgical portfolio picture.

So is this list credible in my opinion - “Yes”

Does it mean a 49% market share - “No”

Does it mean 200 installs per year run rate in 5 years - “Yes” absolutely no reason why not

Do I think small companies could be bought and disrupt this? - “Yes”

But time is running out fast.

Hope this little exercise has been useful.

These are just conjectures and options of the author for educational reasons only.