ABB

ABB runs a hardware-plus-recurring-services model: customers buy industrial robots, automation equipment, and electrification systems, then pay for ongoing maintenance, spare parts, software updates, and integration services over the equipment's lifespan. The Robotics & Discrete Automation division sells to factory operators, automotive manufacturers, and heavy-industry facilities worldwide. Revenue is recognized at point of delivery for hardware, while service contracts and software subscriptions are recognized ratably. The structural economics favor scale in component sourcing and manufacturing: ABB builds its own motors, drives, controllers, and robotic arms, giving it vertical integration that compresses unit costs as volume grows. Aftermarket services — repairs, retrofits, and software subscriptions such as ABB Ability — carry higher margins than the initial hardware sale and provide recurring revenue that smooths out the cyclicality of capital-equipment spending. The hardware sales themselves are lumpy and tied to large industrial capex cycles, but the installed base generates a steady tail of service revenue across years of operation.