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a diminutive 1.2 meters tall, it looks like a child wearing a spacesuit and walks with a deceptively natural gait that belies the whir of gears and motors emanating from its hard plastic body. Reacting to a person entering the lobby of Honda Motor Co.'s Wako Research Center just outside of Tokyo, the robot advances toward the reception desk, stops, bows and says in a prepubescent boy's voice: "Welcome to the Honda R. and D. center. My name is ASIMO." When the visitor offers to shake hands, ASIMO extends a mechanical hand in response. Then, on cue from a Honda employee, the robot waves and emits a chirpy "bye-bye."

Cute. But is this bucket of bolts smart enough to get me a beer? To Masato Hirose, senior chief engineer at the Honda lab, this is not a facetious question. Since 1986, Honda researchers have been trying to build a robot that could balance and walk naturally like a human. With ASIMO (short for Advanced Step in Innovative Mobility), mission accomplished. Now they are moving on to the next epochal challenge: creating a generation of humanoid machines that boast the kind of butlering skills of classic science fiction robots. "Imagine a machine that's as versatile as a human but that works 24 hours a day and does all the household chores," gushes Hirose. "You can't really attach a price tag to what it offers."

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A lot of people would like to. Thanks to advancing computer technology and falling semiconductor prices, companies are starting to dream they might be able to make money selling robots to the masses. In addition to Honda's experimental program, Japanese electronics giants Sony, Matsushita and Sanyo are all developing "personal robots" they hope will some day become as ubiquitous as televisions and at least as companionable as accountants. Sony engineers say the business stands where the personal computer industry stood in the early 1980s, when many doubted whether desktop machines would ever be more than expensive playthings. "PCs are a pretty good business now," says Tatsuzo Ishida, who heads product development at Sony's entertainment robot division. "Maybe in 10 to 20 years, robots will become like PCs."

Plenty of Japanese see a domestic market emerging. According to the Japan Robot Association (an organization currently run by humans), the country's personal-robot market could grow to $8 billion by 2010 from almost nothing today. That projection is based partly on wishful thinking, partly on demographic trends. Japan's rapidly aging population and shrinking workforce is expected to create a growing need for personal assistants and low-level health care workers that machines might fill.

ASIMO was designed with that in mind, says Hirose. The robot is light (52 kilos), lest it stumble and pin a user to the floor, triggering a product-liability lawsuit. Yet it's tall enough to reach light switches and doorknobs or to clear the table. Its mini-cam "eyes" are level with those of a sitting adult for easy communication, and its humanlike form is meant to break down our inhibitions toward sharing a home with a talking toaster.

CIRCUIT CIRCUS Everyone has a theory on what makes a good robot. Here's our assessment: AIBO Creator: Sony Cost: $1,299 Strengths: Has the ability to express up to six emotions, or roughly 5.9999 more than Al Gore Weaknesses: Will only fetch the electronic edition of the New York Times Breakdown: If you paid money for this, chances are it's smarter than you THE TIN MAN Creator: L. Frank Baum Cost: $10 for funnel hat, silver paint Strengths: Character, courage, a frightening proficiency with the ax Weaknesses: No ticker, tendency to rust, much less recyclable than Aluminum Man Breakdown: If he only had a heart ... well, he'd still have trouble with lead poisoning BICENTENNIAL MAN Creator: Touchstone Pictures Cost: 132 minutes of your life Strengths: Can generate time-space boredom field capable of making two hours seem like 200 years Weaknesses: Foolish decision to develop human emotions instead of more useful death ray Breakdown: Will touch your heart—and crush it like Robin Williams' career KIM JONG II Creator: Kim Il Sung Cost: The spirit of a nation Strengths: Unbending will, remorselessness, thousands of minions to do his bidding Weaknesses: Embargo on North Korea means he does not have access to sophisticated computers Breakdown: We're not entirely sure he's a robot, but he certainly doesn't seem human

Sadly, ASIMO is not for sale. Honda, which has built 20 ASIMOs, won't say how much it cost to develop, but the firm is putting them to tentative commercial use as a public relations gimmick. Honda is renting ASIMOs to four companies, including IBM Japan and a science museum in Tokyo, for reception duties at the circuit-scrambling price of $163,000 a year.

Indeed, there's a gaping cost-benefit gulf to be bridged before Honda's little walking man can evolve into the next Walkman. Consumers have been conditioned to expect robots to behave like C-3PO of Star Wars. But creating artificially intelligent machines that can sense and interact with the environment in a convincing way is a monumentally complex computing task. The Japanese government's Humanoid Robotics Project set out five years ago to deliver a robot versatile enough to perform hard labor in hazardous conditions. Some $40 million has been spent but the project's HRP-1 robot still suffers from poor visual recognition and has trouble walking on rough terrain. Likewise, ASIMO understands only the simplest of commands and isn't dexterous enough to wield a mop. Yet it costs more to lease than a Lamborghini. "We want to improve ASIMO to make it marketable as soon as possible. But it's not at a stage where we can draft a business strategy," admits Honda spokesman Yuji Hatano.

Rival companies are racing to build more specialized machines. Matsushita, maker of the Panasonic brand, has developed a vacuum-cleaning droid with powerful dust sensors, while Sanyo is working to commercialize a remote-controlled guard dog equipped with a digital camera and mobile phone. Sony has taken a slightly different approach. While Honda researchers pursue the holy grail of the film Bicentennial Man—a mechanized butler—Sony's vision is closer to the sci-fi movie A.I., which features a boy-bot that offers unconditional robot lovin'. The company has sold more than 100,000 of its toylike AIBOs since the robo-dog was introduced three years ago, at an average price of $1,500 each. "I see robots in consumers' homes as their personal pals," says Satoshi Amagai, chief of Sony's robot division. "They will talk to you, sing to you, remind you of things and will help you live more effectively."

Sony declines to say if AIBO (which means "partner" in Japanese) has proved profitable. But there seems to be real demand for robot pets, judging by the AIBO owners clubs springing up in the U.S. and Japan. Sayuri Toba, a thirtysomething medical clerk in Tokyo, says she and her husband splurged on an AIBO named Hal two years ago. She looks back nostalgically on Hal's first day as a member of the family: "I was so happy. I felt like I was looking at a new being." She still plays with Hal every day after work—it can chase a ball, grasps dozens of simple remote-controlled commands and its software allows it to "mature" over time, behaving less and less like a puppy. On some weekends, Toba organizes meetings of AIBO owners so their plastic pets can play together. "I know it doesn't have consciousness," she says. "But I love my AIBO, and I want to believe that he loves me, too."

Playing on these yearnings, Sony is now working on the SDR-4X, a gnome-sized humanoid bot that can sing, dance, kick a ball—and chat. The company plans to equip the device with a 60,000-word vocabulary and the ability to recognize 10 human faces and voices. The SDR-4X could hit the market as early as next year, but it will cost a good chunk of an annual salary. Sony doesn't expect to sell many. The SDR-4X "is a symbolic product," Amagai concedes.

In fact, the considerable progress made recently has only underscored how far researchers and engineers are from their goal. Kazuo Tanie, a respected robot researcher and top government adviser, says the technology remains too difficult for any single company to master alone, and the business would ripen more quickly if there were less competition and more pooling of resources. Manufacturers, however, hate the idea of cooperation. After all, Honda's and Sony's corporate images are burnished by their keen machines—they demonstrate technological superiority over rivals. Even if it can't do the dishes, as a walking billboard ASIMO does just fine.