Orthopedic Enabling Technology Market Size and Share
Market Definition
Surgical planning, navigation technologies, robotics, patient monitoring and other digital tools used in orthopedics. Excludes sports medicine capital equipment.
October 2024 (update coming January 2025)
Mike Evers, Senior Market Analyst
Welcome to our overview of the orthopedic enabling technology market. This page builds upon the inaugural chapter covering enabling technology in our latest edition of THE ORTHOPAEDIC INDUSTRY ANNUAL REPORT®. It is a dynamic and rapidly changing segment as the industry learns how to best leverage technology.
The Market at a Glance
Enabling technology sales totaled just over $1.3 billion in 2023, accounting for 2.2% of the orthopedic market. The segment’s success and revenue performance uncoupled over the last two years, as placement strategies favor implant volume commitments over outright technology system sales. Big ticket items like robotic systems started shifting away from outright sales in 2022 due to competitive pressure, procedures moving to ASCs and economic disruption.
Market Forecast
We expect enabling technology sales to grow by 7.5% to nudge past $1.4 billion in 2024. As the U.S. market moves toward volume-based agreements, the growth rate will slow — or, more accurately, read-through in other segments like joint replacement and spine via implant sales. By 2027, we expect enabling technology sales to surpass $1.7 billion.
Exhibit 1: Worldwide Enabling Technology Sales by Year ($millions)
Get More Orthopedic Market Data. Download the Orthopedic Companies Sales Matrix for our most complete and granular numbers. It contains worldwide orthopedic sales for 75 public and private companies by segment from 2016 through 2024.
Here are some of the enabling technology market dynamics we considered in our forecasts:
Driving Market Adoption
Use of orthopedic enabling technology plateaued after the initial influx of early adopters. About 20% of joint replacement cases use navigation and only 11% use robotics. Those numbers are even lower for spine surgery, at 18% and 3%, respectively. Mass market adoption likely remains gated by disruptive form factors, time loss, high costs and closed ecosystems. Over the long term, we expect most orthopedic surgeries will involve planning and navigation. Widespread use of robotics feels inevitable, but it might require some paradigm-shifting innovations to get over the hump.
Open vs. Closed Robotic Systems
The prevailing placement strategy for orthopedic robots is the razor/razorblade model. The largest companies forego upfront system payments for implant volume commitments. Hospitals and ASCs are locked into a single implant vendor, making driving value with robotic programs more complicated. Companies like THINK Surgical think closed systems are an obstacle to broad market adoption and are attempting to commercialize robots with open implant libraries. If more of the market adopts open-system robots, as well as navigation systems, enabling technologies might reach mainstream utilization in orthopedics sooner than later.
The existing four large orthopedic companies with a dominant position in the joint replacement market are not robotic companies; they’re implant companies. All they care about is defending their highly lucrative implant market and its 80% margins. That drives a lot of their behaviors and their decisions.
Stuart Simpson, THINK Surgical CEO
Ticket to the Dance
Despite low utilization and barriers to adoption, orthopedic enabling technology is a must-have among the top companies in joint replacement and spine. Stryker CEO Kevin Lobo called enabling technology the “ticket to the dance” for the spine market. The company struck gold with its combination of Mako and cementless knees but struggled to meet expectations in spine without a robot. Digital technologies saw increased M&A and funding activity post-2020. We expect the strategic focus on enabling technologies to increase as more competitors and products enter the market in the coming years.
Sales by Region
While the U.S. accounts for three-quarters of all enabling technology revenue, international markets are increasingly important to the segment and could be nearing an inflection point for robotics. Stryker CEO Kevin Lobo said Japan, India and some European companies are “taking off” and resemble the U.S. market of five or six years ago. The Australian market is more mature due to its earlier adoption of robotics.
Stryker’s performance in 2023 illustrates the momentum of international markets for enabling technology sales. The company’s segment that houses sales of its Mako robotic system saw a low single-digit decline in the U.S. but grew nearly 40% internationally.
Exhibit 2: Enabling Technology Sales by Region ($millions)
| Region | FY23 | FY22 | $ Chg | % Chg |
|---|---|---|---|---|
| US | $1,009.0 | $924.0 | $84.9 | 9.2% |
| OUS | $298.0 | $268.3 | $29.7 | 11.1% |
| EMEA | $194.7 | $175.9 | $18.9 | 10.7% |
| APAC | $90.2 | $81.0 | $9.2 | 11.4% |
| ROW | $13.1 | $11.4 | $1.6 | 14.2% |
| Total | $1,307.0 | $1,192.3 | $114.6 | 9.6% |
Exhibit 3: Enabling Technology Market Share by Region ($millions)
Top Companies
The segment’s top six companies have total orthopedic revenue over $1 billion. These players account for 75% of enabling technology sales. Joint replacement and spine naturally attract the most enabling technology development as the largest segments in orthopedics. However, technologies like 7D (Orthofix) and Disior (Paragon 28) could have broader applications.
Smaller innovators typically get acquired earlier in their lifecycle, given the complexities of software and hardware integration.
Our robot is superior to the current competition and the competition that will arrive over the next 24 months. One reason for our merger with NuVasive was to create the size and reach to not only penetrate the market faster but also to compete in this fashion.
Dan Scavilla, Globus Medical President & CEO
Exhibit 4: Enabling Technology Players Over $50 Million and All Others
| Company | FY23 | FY22 | $ Chg | % Chg |
|---|---|---|---|---|
| Stryker | $299.0 | $280.8 | $18.3 | 6.5% |
| Globus Medical * | $256.0 | $225.7 | $30.3 | 13.4% |
| Medtronic | $163.0 | $151.7 | $11.3 | 7.4% |
| Smith+Nephew | $99.3 | $77.9 | $21.4 | 27.5% |
| Zimmer Biomet | $94.1 | $85.8 | $8.4 | 9.8% |
| DePuy Synthes | $66.2 | $56.9 | $9.3 | 16.4% |
| ATEC | $59.0 | $48.0 | $11.0 | 22.9% |
| OrthAlign | $52.0 | $41.5 | $10.5 | 25.3% |
| All Others | $218.3 | $224.2 | ($5.8) | (2.6%) |
| Segment Total | $1,307.0 | $1,192.3 | $114.6 | 9.6% |
Exhibit 5: Enabling Technology Market Share by Company ($millions)
* On a pro forma basis.
The enabling technology segment saw robust demand and a healthy capital environment in 2023. Robot utilization increased during the year. Stryker reported that 60% of its knees and 34% of its hips in the U.S. involved the use of Mako. Smith+Nephew’s CORI system accounted for 25% of its U.S. knees, and DePuy Synthes’ VELYS system surpassed 30,000 procedures.
Zimmer Biomet plans to hit 300 robotic placements per year, but it remains to be seen how its upcoming ROSA Shoulder robot will impact that number. The company expects a substantial boost from the system, the first-to-market for shoulder arthroplasty that aims to simplify a complex procedure.
Medtronic and Globus Medical reign supreme in spine, but Stryker plans to launch its spine robot in mid-2024. Enabling technology is increasingly vital to compete at the highest levels of the spine market and is a crucial driver for consolidation.
Important Developments in the Enabling Technology Market
Technology Shifting Competitive Dynamics
Scale alone is no longer enough to compete at the top levels of spine. Enabling technology’s role is expanding across orthopedics, but it has become a strategic necessity for the market’s biggest players. Mid-tier companies like Orthofix and ATEC recognize the value of technology in spine surgery, while Augmedics’ AR-based navigation technology continues to draw investor dollars despite the tough funding environment.
Accounts are making investments in a company now. The Medtronic ecosystem versus some other ecosystem, and there’s not many out there. It’s also changing the industry structure because it takes a lot of expertise and capital to build these ecosystems. You don’t have this long tail of tiny spine companies that are preying on docs. Those are going away.
Geoffrey Martha, Medtronic CEO
More Robots on the Way
Zimmer Biomet will be the first to market with a robot for shoulder arthroplasty after playing catch-up to Stryker’s Mako in knee replacement. ROSA Shoulder won’t see its first competitor for a while. Stryker put its shoulder robot on hold to launch its upcoming spine system. Smith+Nephew said it is roughly two years away from adding a shoulder application to its CORI robot. Zimmer Biomet has a golden opportunity in its shoulder replacement business, but market dynamics are far different from when Stryker used Mako to dominate knee replacement.
Could More Options Drive Tech Adoption?
When we spoke to THINK Surgical CEO Stuart Simpson in late 2023, he said he wanted the large device companies to see THINK as a partner rather than competition. The top players are starting to get on board, judging from Zimmer Biomet’s recent distribution agreement with THINK Surgical. It is part of a larger strategy shift at Zimmer Biomet aimed at adding breadth to its enabling tech portfolio, as it plans to launch multiple new ROSA applications and recently acquired OrthoGrid for its navigation technology.
The Promise of Augmented Reality (AR)
Companies like Enovis, Augmedics and OnPoint Surgical are betting on easy-to-use, cost-effective navigation systems that utilize AR. While robotics gets a lot of attention, these systems will likely play the primary role in driving market adoption of enabling technology. Investors are betting on AR as well. Augumedics raised over $82 million in 2023 to expand its commercial footprint and deploy next-generation advancements for its xvision Spine System.
Further Reading
Thanks for visiting! Need more insight on the enabling technology market? Questions and comments are always welcome. You can reach me by email. Until then, I’ve gathered a few posts about enabling technology from recent months. Enjoy!
September 12, 2024
,
Julie A. Vetalice
Our overview of the $1.3 billion orthopedic enabling technology includes up-to-date information on forecasted growth, the top companies and industry-driving trends.
Market Definition
Surgical planning, navigation technologies, robotics, patient monitoring and other digital tools used in orthopedics. Excludes sports medicine capital equipment.
October 2024 (update coming January 2025)
Mike Evers, Senior Market Analyst
Welcome to our overview of the orthopedic enabling technology market. This page builds upon the inaugural chapter covering enabling technology in our latest edition of THE ORTHOPAEDIC INDUSTRY ANNUAL REPORT®. It is a dynamic and rapidly changing segment as the industry learns how to best leverage technology.
The Market at a Glance
Enabling technology sales totaled just over $1.3 billion in 2023, accounting for 2.2% of the orthopedic market. The segment’s success and revenue performance uncoupled over the last two years, as placement strategies favor implant volume commitments over outright technology system sales. Big ticket items like robotic systems started shifting away from outright sales in 2022 due to competitive pressure, procedures moving to ASCs and economic disruption.
Market Forecast
We expect enabling technology sales to grow by 7.5% to nudge past $1.4 billion in 2024. As the U.S. market moves toward volume-based agreements, the growth rate will slow — or, more accurately, read-through in other segments like joint replacement and spine via implant sales. By 2027, we expect enabling technology sales to surpass $1.7 billion.
Exhibit 1: Worldwide Enabling Technology Sales by Year ($millions)
Get More Orthopedic Market Data. Download the Orthopedic Companies Sales Matrix for our most complete and granular numbers. It contains worldwide orthopedic sales for 75 public and private companies by segment from 2016 through 2024.
Here are some of the enabling technology market dynamics we considered in our forecasts:
Driving Market Adoption
Use of orthopedic enabling technology plateaued after the initial influx of early adopters. About 20% of joint replacement cases use navigation and only 11% use robotics. Those numbers are even lower for spine surgery, at 18% and 3%, respectively. Mass market adoption likely remains gated by disruptive form factors, time loss, high costs and closed ecosystems. Over the long term, we expect most orthopedic surgeries will involve planning and navigation. Widespread use of robotics feels inevitable, but it might require some paradigm-shifting innovations to get over the hump.
Open vs. Closed Robotic Systems
The prevailing placement strategy for orthopedic robots is the razor/razorblade model. The largest companies forego upfront system payments for implant volume commitments. Hospitals and ASCs are locked into a single implant vendor, making driving value with robotic programs more complicated. Companies like THINK Surgical think closed systems are an obstacle to broad market adoption and are attempting to commercialize robots with open implant libraries. If more of the market adopts open-system robots, as well as navigation systems, enabling technologies might reach mainstream utilization in orthopedics sooner than later.
The existing four large orthopedic companies with a dominant position in the joint replacement market are not robotic companies; they’re implant companies. All they care about is defending their highly lucrative implant market and its 80% margins. That drives a lot of their behaviors and their decisions.
Stuart Simpson, THINK Surgical CEO
Ticket to the Dance
Despite low utilization and barriers to adoption, orthopedic enabling technology is a must-have among the top companies in joint replacement and spine. Stryker CEO Kevin Lobo called enabling technology the “ticket to the dance” for the spine market. The company struck gold with its combination of Mako and cementless knees but struggled to meet expectations in spine without a robot. Digital technologies saw increased M&A and funding activity post-2020. We expect the strategic focus on enabling technologies to increase as more competitors and products enter the market in the coming years.
Sales by Region
While the U.S. accounts for three-quarters of all enabling technology revenue, international markets are increasingly important to the segment and could be nearing an inflection point for robotics. Stryker CEO Kevin Lobo said Japan, India and some European companies are “taking off” and resemble the U.S. market of five or six years ago. The Australian market is more mature due to its earlier adoption of robotics.
Stryker’s performance in 2023 illustrates the momentum of international markets for enabling technology sales. The company’s segment that houses sales of its Mako robotic system saw a low single-digit decline in the U.S. but grew nearly 40% internationally.
Exhibit 2: Enabling Technology Sales by Region ($millions)
| Region | FY23 | FY22 | $ Chg | % Chg |
|---|---|---|---|---|
| US | $1,009.0 | $924.0 | $84.9 | 9.2% |
| OUS | $298.0 | $268.3 | $29.7 | 11.1% |
| EMEA | $194.7 | $175.9 | $18.9 | 10.7% |
| APAC | $90.2 | $81.0 | $9.2 | 11.4% |
| ROW | $13.1 | $11.4 | $1.6 | 14.2% |
| Total | $1,307.0 | $1,192.3 | $114.6 | 9.6% |
Exhibit 3: Enabling Technology Market Share by Region ($millions)
Top Companies
The segment’s top six companies have total orthopedic revenue over $1 billion. These players account for 75% of enabling technology sales. Joint replacement and spine naturally attract the most enabling technology development as the largest segments in orthopedics. However, technologies like 7D (Orthofix) and Disior (Paragon 28) could have broader applications.
Smaller innovators typically get acquired earlier in their lifecycle, given the complexities of software and hardware integration.
Our robot is superior to the current competition and the competition that will arrive over the next 24 months. One reason for our merger with NuVasive was to create the size and reach to not only penetrate the market faster but also to compete in this fashion.
Dan Scavilla, Globus Medical President & CEO
Exhibit 4: Enabling Technology Players Over $50 Million and All Others
| Company | FY23 | FY22 | $ Chg | % Chg |
|---|---|---|---|---|
| Stryker | $299.0 | $280.8 | $18.3 | 6.5% |
| Globus Medical * | $256.0 | $225.7 | $30.3 | 13.4% |
| Medtronic | $163.0 | $151.7 | $11.3 | 7.4% |
| Smith+Nephew | $99.3 | $77.9 | $21.4 | 27.5% |
| Zimmer Biomet | $94.1 | $85.8 | $8.4 | 9.8% |
| DePuy Synthes | $66.2 | $56.9 | $9.3 | 16.4% |
| ATEC | $59.0 | $48.0 | $11.0 | 22.9% |
| OrthAlign | $52.0 | $41.5 | $10.5 | 25.3% |
| All Others | $218.3 | $224.2 | ($5.8) | (2.6%) |
| Segment Total | $1,307.0 | $1,192.3 | $114.6 | 9.6% |
Exhibit 5: Enabling Technology Market Share by Company ($millions)
* On a pro forma basis.
The enabling technology segment saw robust demand and a healthy capital environment in 2023. Robot utilization increased during the year. Stryker reported that 60% of its knees and 34% of its hips in the U.S. involved the use of Mako. Smith+Nephew’s CORI system accounted for 25% of its U.S. knees, and DePuy Synthes’ VELYS system surpassed 30,000 procedures.
Zimmer Biomet plans to hit 300 robotic placements per year, but it remains to be seen how its upcoming ROSA Shoulder robot will impact that number. The company expects a substantial boost from the system, the first-to-market for shoulder arthroplasty that aims to simplify a complex procedure.
Medtronic and Globus Medical reign supreme in spine, but Stryker plans to launch its spine robot in mid-2024. Enabling technology is increasingly vital to compete at the highest levels of the spine market and is a crucial driver for consolidation.
Important Developments in the Enabling Technology Market
Technology Shifting Competitive Dynamics
Scale alone is no longer enough to compete at the top levels of spine. Enabling technology’s role is expanding across orthopedics, but it has become a strategic necessity for the market’s biggest players. Mid-tier companies like Orthofix and ATEC recognize the value of technology in spine surgery, while Augmedics’ AR-based navigation technology continues to draw investor dollars despite the tough funding environment.
Accounts are making investments in a company now. The Medtronic ecosystem versus some other ecosystem, and there’s not many out there. It’s also changing the industry structure because it takes a lot of expertise and capital to build these ecosystems. You don’t have this long tail of tiny spine companies that are preying on docs. Those are going away.
Geoffrey Martha, Medtronic CEO
More Robots on the Way
Zimmer Biomet will be the first to market with a robot for shoulder arthroplasty after playing catch-up to Stryker’s Mako in knee replacement. ROSA Shoulder won’t see its first competitor for a while. Stryker put its shoulder robot on hold to launch its upcoming spine system. Smith+Nephew said it is roughly two years away from adding a shoulder application to its CORI robot. Zimmer Biomet has a golden opportunity in its shoulder replacement business, but market dynamics are far different from when Stryker used Mako to dominate knee replacement.
Could More Options Drive Tech Adoption?
When we spoke to THINK Surgical CEO Stuart Simpson in late 2023, he said he wanted the large device companies to see THINK as a partner rather than competition. The top players are starting to get on board, judging from Zimmer Biomet’s recent distribution agreement with THINK Surgical. It is part of a larger strategy shift at Zimmer Biomet aimed at adding breadth to its enabling tech portfolio, as it plans to launch multiple new ROSA applications and recently acquired OrthoGrid for its navigation technology.
The Promise of Augmented Reality (AR)
Companies like Enovis, Augmedics and OnPoint Surgical are betting on easy-to-use, cost-effective navigation systems that utilize AR. While robotics gets a lot of attention, these systems will likely play the primary role in driving market adoption of enabling technology. Investors are betting on AR as well. Augumedics raised over $82 million in 2023 to expand its commercial footprint and deploy next-generation advancements for its xvision Spine System.
Further Reading
Thanks for visiting! Need more insight on the enabling technology market? Questions and comments are always welcome. You can reach me by email. Until then, I’ve gathered a few posts about enabling technology from recent months. Enjoy!
September 12, 2024
,
Julie A. Vetalice
You are out of free articles for this month
Subscribe as a Guest for $0 and unlock a total of 5 articles per month.
You are out of five articles for this month
Subscribe as an Executive Member for access to unlimited articles, THE ORTHOPAEDIC INDUSTRY ANNUAL REPORT and more.
