Surgical planning, navigation technologies, robotics, patient monitoring and other digital tools used in orthopedics. Excludes sports medicine capital equipment.
January 2024
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.
Enabling technology sales neared $1.3 billion in 2023, accounting for 2.2% of the $59 billion global orthopedic market. The segment enjoyed relatively buoyant sales throughout the pandemic period. However, sustained market pressures shifted capital equipment acquisitions away from outright sales toward rentals and volume-based deals.
We expect enabling technology sales to exceed $1.3 billion in 2023, growing just under 10%. Sustained economic pressure and looming recession fears will continue driving down technology acquisition costs, with companies instead benefiting from implant volume commitments and improved product mix. Still, we estimate that the market will continue to experience double-digit growth and reach $2 billion in 2027.
Exhibit 1: Worldwide Enabling Technology Sales by Year ($millions)
Get More Orthopedic Market Data. Download the Orthopedic Revenue Matrix for our most complete and granular numbers. It contains worldwide orthopedic sales for 68 public and private companies by segment from 2016 through 2023.
Low utilization rates, barriers to adoption and the growing strategic importance of technology are some factors we considered in our forecast.
Adoption 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 issues like disruptive form factors, time loss, high costs and closed ecosystems. Over the long term, we expect most orthopedic surgeries will use planning and navigation. Widespread use of robotics feels inevitable, but it might require some paradigm-shifting innovations to get over the hump.
The prevailing placement strategy for orthopedic robots is the razor and 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 difficult. Companies like THINK Surgical think closed systems are an obstacle to broad market adoption and are attempting to commercial robots with open implant libraries.
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.
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 both increased M&A and funding activity post-2020. We expect the strategic focus on enabling technologies to increase in the coming years as more competitors and products enter the market.
Companies in the enabling technology segment are focused on expanding sales outside of the U.S. Stryker said it reached an inflection point for robotics outside the U.S. in 2023. Zimmer Biomet’s robotic placements are evenly split between the U.S and OUS markets, with ROSA robots in more than 40 countries.
Mid-sized and smaller companies like MicroPort, Naviswiss, Tinavi and Point Robotics are also making international robotics and navigation markets more competitive.
The U.S. accounted for 77% of enabling technology market sales and surpassed $1 billion in 2023, while OUS markets reached nearly $300 million in enabling technology sales.
Exhibit 2: Enabling Technology Sales by Region ($millions)
Region | FY23 | FY22 | $ Chg | % Chg |
---|---|---|---|---|
US | $1,010.9 | $924.0 | $86.9 | 9.4% |
OUS | $298.6 | $268.3 | $30.3 | 11.3% |
EMEA | $195.1 | $175.9 | $19.2 | 10.9% |
APAC | $90.4 | $81.0 | $9.4 | 11.6% |
ROW | $13.1 | $11.4 | $1.6 | 14.4% |
Total | $1,309.5 | $1,192.3 | $117.2 | 9.8% |
Exhibit 3: Enabling Technology Market Share by Region ($millions)
Orthopedic enabling technologies are primarily focused on joint replacement and spine surgeries. The segment is, therefore, dominated by the largest players in those markets.
Six of the top 10 enabling technology companies are players with more than $1 billion in total annual sales — together, these companies command 75% of the segment. However, the space also hosts many small, innovative companies seeking to address gaps in orthopedic care through preoperative planning software and navigation.
There are two questions that we try to solve with payors and providers every day: Can we shorten the length of a stay post-surgery? Can we lower readmission rates? If you can do that with data and technology, the market will pay for it.
Exhibit 4: Top 10 Enabling Technology Players and All Others ($millions)
Company | FY23E | FY22A | $ Chg | % Chg |
---|---|---|---|---|
Stryker | $294.4 | $280.8 | $13.7 | 4.9% |
Globus Medical * | $257.7 | $225.7 | $32.0 | 14.2% |
Medtronic | $163.0 | $151.7 | $11.3 | 7.4% |
Zimmer Biomet | $98.8 | $94.1 | $4.6 | 4.9% |
Smith+Nephew | $98.4 | $77.9 | $20.5 | 26.3% |
DePuy Synthes | $73.3 | $55.0 | $18.3 | 33.3% |
ATEC | $58.0 | $48.0 | $10.0 | 20.8% |
OrthAlign | $52.0 | $41.5 | $10.5 | 25.3% |
Corin | $37.0 | $33.1 | $4.0 | 12% |
Aesculap | $19.7 | $17.8 | $2.0 | 11.1% |
All Others | $157.1 | $166.8 | ($9.7) | (5.8%) |
Segment Total | $1,309.5 | $1,192.3 | $117.2 | 9.8% |
Exhibit 5: Enabling Technology Market Share by Company ($millions)
* On a pro forma basis.
The enabling technology segment saw robust demand and a healthy capital environment in 2023. Zimmer Biomet is on track to achieve its planned 300 placements during the year, while 25% of Smith+Nephew’s knee procedures are done using the CORI system. DePuy Synthes’ VELYS system surpassed 30,000 procedures. Despite those accomplishments, the robotics race in joint replacement is still Stryker’s to lose.
In spine, Medtronic and Globus Medical reign supreme 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 key driver for consolidation.
Orthopedic enabling technologies generate troves of data that companies are using to create predictive analytics through artificial intelligence. Companies with broad ecosystems of technologies are excited about the possibilities of collecting and integrating data throughout the patient experience. Zimmer Biomet, for example, can collect data through ROSA robotic procedures, use of the mymobility platform and the Persona IQ smart knee implant.
We’ve relied on other static modalities for decades. We should be looking to develop intelligent, intuitive imaging technologies that collect clean, informative datasets that we can utilize to fuel truly effective AI.
This market-altering deal could greatly enhance the penetration of Globus’ flagship enabling technologies across robotics and imaging. The synergy would give Globus added punching power in its head-to-head competition with Medtronic. Less clear is what happens to NuVasive’s Pulse platform. Given the importance of efficient and user-friendly integration among components of an ecosystem, it could be some time before Pulse is fully folded in.
Stryker’s struggles in the spine segment highlight the importance of enabling technology. The company said that its spine business will remain in a “dogfight” into 2024 because it lacks a robotic solution in that segment. Stryker reprioritized its robotic development roadmap to focus on its spine application over its shoulder surgery application. Still, the company remains conservative on its timelines. “Robotics is hard,” said Stryker CEO Kevin Lobo. “Ask any of the companies that are trying to launch platforms.”
The number of companies with navigation systems is more than double those with surgical robots. Further, we expect smaller companies to continue developing navigated instruments that integrate with systems on the market. Navigation will remain an essential and accessible technology due to its cost, size and speed. Integrating augmented reality and artificial intelligence could be game changers in its adoption.
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!
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.
Surgical planning, navigation technologies, robotics, patient monitoring and other digital tools used in orthopedics. Excludes sports medicine capital equipment.
January 2024
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.
Enabling technology sales neared $1.3 billion in 2023, accounting for 2.2% of the $59 billion global orthopedic market. The segment enjoyed relatively buoyant sales throughout the pandemic period. However, sustained market pressures shifted capital equipment acquisitions away from outright sales toward rentals and volume-based deals.
We expect enabling technology sales to exceed $1.3 billion in 2023, growing just under 10%. Sustained economic pressure and looming recession fears will continue driving down technology acquisition costs, with companies instead benefiting from implant volume commitments and improved product mix. Still, we estimate that the market will continue to experience double-digit growth and reach $2 billion in 2027.
Exhibit 1: Worldwide Enabling Technology Sales by Year ($millions)
Get More Orthopedic Market Data. Download the Orthopedic Revenue Matrix for our most complete and granular numbers. It contains worldwide orthopedic sales for 68 public and private companies by segment from 2016 through 2023.
Low utilization rates, barriers to adoption and the growing strategic importance of technology are some factors we considered in our forecast.
Adoption 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 issues like disruptive form factors, time loss, high costs and closed ecosystems. Over the long term, we expect most orthopedic surgeries will use planning and navigation. Widespread use of robotics feels inevitable, but it might require some paradigm-shifting innovations to get over the hump.
The prevailing placement strategy for orthopedic robots is the razor and 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 difficult. Companies like THINK Surgical think closed systems are an obstacle to broad market adoption and are attempting to commercial robots with open implant libraries.
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.
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 both increased M&A and funding activity post-2020. We expect the strategic focus on enabling technologies to increase in the coming years as more competitors and products enter the market.
Companies in the enabling technology segment are focused on expanding sales outside of the U.S. Stryker said it reached an inflection point for robotics outside the U.S. in 2023. Zimmer Biomet’s robotic placements are evenly split between the U.S and OUS markets, with ROSA robots in more than 40 countries.
Mid-sized and smaller companies like MicroPort, Naviswiss, Tinavi and Point Robotics are also making international robotics and navigation markets more competitive.
The U.S. accounted for 77% of enabling technology market sales and surpassed $1 billion in 2023, while OUS markets reached nearly $300 million in enabling technology sales.
Exhibit 2: Enabling Technology Sales by Region ($millions)
Region | FY23 | FY22 | $ Chg | % Chg |
---|---|---|---|---|
US | $1,010.9 | $924.0 | $86.9 | 9.4% |
OUS | $298.6 | $268.3 | $30.3 | 11.3% |
EMEA | $195.1 | $175.9 | $19.2 | 10.9% |
APAC | $90.4 | $81.0 | $9.4 | 11.6% |
ROW | $13.1 | $11.4 | $1.6 | 14.4% |
Total | $1,309.5 | $1,192.3 | $117.2 | 9.8% |
Exhibit 3: Enabling Technology Market Share by Region ($millions)
Orthopedic enabling technologies are primarily focused on joint replacement and spine surgeries. The segment is, therefore, dominated by the largest players in those markets.
Six of the top 10 enabling technology companies are players with more than $1 billion in total annual sales — together, these companies command 75% of the segment. However, the space also hosts many small, innovative companies seeking to address gaps in orthopedic care through preoperative planning software and navigation.
There are two questions that we try to solve with payors and providers every day: Can we shorten the length of a stay post-surgery? Can we lower readmission rates? If you can do that with data and technology, the market will pay for it.
Exhibit 4: Top 10 Enabling Technology Players and All Others ($millions)
Company | FY23E | FY22A | $ Chg | % Chg |
---|---|---|---|---|
Stryker | $294.4 | $280.8 | $13.7 | 4.9% |
Globus Medical * | $257.7 | $225.7 | $32.0 | 14.2% |
Medtronic | $163.0 | $151.7 | $11.3 | 7.4% |
Zimmer Biomet | $98.8 | $94.1 | $4.6 | 4.9% |
Smith+Nephew | $98.4 | $77.9 | $20.5 | 26.3% |
DePuy Synthes | $73.3 | $55.0 | $18.3 | 33.3% |
ATEC | $58.0 | $48.0 | $10.0 | 20.8% |
OrthAlign | $52.0 | $41.5 | $10.5 | 25.3% |
Corin | $37.0 | $33.1 | $4.0 | 12% |
Aesculap | $19.7 | $17.8 | $2.0 | 11.1% |
All Others | $157.1 | $166.8 | ($9.7) | (5.8%) |
Segment Total | $1,309.5 | $1,192.3 | $117.2 | 9.8% |
Exhibit 5: Enabling Technology Market Share by Company ($millions)
* On a pro forma basis.
The enabling technology segment saw robust demand and a healthy capital environment in 2023. Zimmer Biomet is on track to achieve its planned 300 placements during the year, while 25% of Smith+Nephew’s knee procedures are done using the CORI system. DePuy Synthes’ VELYS system surpassed 30,000 procedures. Despite those accomplishments, the robotics race in joint replacement is still Stryker’s to lose.
In spine, Medtronic and Globus Medical reign supreme 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 key driver for consolidation.
Orthopedic enabling technologies generate troves of data that companies are using to create predictive analytics through artificial intelligence. Companies with broad ecosystems of technologies are excited about the possibilities of collecting and integrating data throughout the patient experience. Zimmer Biomet, for example, can collect data through ROSA robotic procedures, use of the mymobility platform and the Persona IQ smart knee implant.
We’ve relied on other static modalities for decades. We should be looking to develop intelligent, intuitive imaging technologies that collect clean, informative datasets that we can utilize to fuel truly effective AI.
This market-altering deal could greatly enhance the penetration of Globus’ flagship enabling technologies across robotics and imaging. The synergy would give Globus added punching power in its head-to-head competition with Medtronic. Less clear is what happens to NuVasive’s Pulse platform. Given the importance of efficient and user-friendly integration among components of an ecosystem, it could be some time before Pulse is fully folded in.
Stryker’s struggles in the spine segment highlight the importance of enabling technology. The company said that its spine business will remain in a “dogfight” into 2024 because it lacks a robotic solution in that segment. Stryker reprioritized its robotic development roadmap to focus on its spine application over its shoulder surgery application. Still, the company remains conservative on its timelines. “Robotics is hard,” said Stryker CEO Kevin Lobo. “Ask any of the companies that are trying to launch platforms.”
The number of companies with navigation systems is more than double those with surgical robots. Further, we expect smaller companies to continue developing navigated instruments that integrate with systems on the market. Navigation will remain an essential and accessible technology due to its cost, size and speed. Integrating augmented reality and artificial intelligence could be game changers in its adoption.
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!
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