The death of the Amazon deal could mean goodbye to iRobot

Amazon backing out of its deal to buy iRobot over regulatory issues may seem like a win for privacy advocates, but it could be the death knell for the Roomba robot vacuum as we know it.

On the face of it, the European Commission’s objection that the deal was anti-competitive is highly ironic for iRobot, a struggling market leader struggling against a giant wave of competition. It has been relying on Amazon to provide it with a cash injection as well as the resources it needs to stay afloat in today’s insanely competitive robot vacuum market. But the deal is over, and iRobot’s competition remains.

iRobot’s dominant market share has been steadily eroding since 2014. According to data from Statista, it dropped from 64 percent in 2016 to 46 percent in 2020. As someone who has been reviewing robot vacuums for more than five years, it’s easy to see why.

In the past decade, Chinese companies like Ecovacs (Deebot/Yeedi), Anker (Eufy), Roborock (backed by Xiaomi), and Dreame Technology have stormed the global market with cheaper and flashier options.

US-based Samsung and SharkNinja also take the cake, not to mention dozens of no-name brands that have robots available on Amazon for under $200 — a fraction of the price of flagship brands Roborock ($1,600) and Roomba ($1,400). dollar).

The market was tough enough to drop one US-based robovac company last year, Neato Robotics. Now, it’s iRobot that has problems. With a net loss reported for 2022, it will likely need a deal like Amazon’s to survive.

The sale could have helped iRobot “better compete in the global marketplace, particularly against companies and from countries that are not subject to the same regulatory requirements in fast-moving technology sectors like robotics,” Amazon Vice President David Zapolsky said when Amazon announced the sale. The deal was abandoned.

Now iRobot has lost its CEO and founder Colin Angle, is laying off employees, and is facing an existential crisis, which is very unfortunate because it is still our best bet for truly intelligent and innovative robots. Led by Angle, iRobot has been a leading innovator in home robotics over the past three decades. Its total developments exceed those of competitors such as Roborock and Ecovacs. If anyone is going to bring us Rosie the Robot, it’s iRobot.

iRobot invented the first successful robot vacuum more than 20 years ago, but if your last experience with a Roomba was before 2013, things have changed. Today, all of these floor cleaning devices have become much better, largely due to iRobot’s innovations being adopted by the rest of the market.

It was the first to implement an efficient automatic vacuum dock that sucks dirt out of the robot’s box for you. (Others have tried, but versions of the iRobot method are now standard.) It was one of the first companies to offer efficient room mapping to move robots away from its randomness, and it has led the way in developing reliable AI algorithms to avoid household objects like socks, phone cables, and pet waste. Based on my extensive experience testing these robots, they are still the best at cleaning your floors. Its unique dual rubber brush system, which some have copied but none have surpassed, gets the job done.

What also sets iRobot apart is its approach to software. On top of a powerful, easy-to-use app, the company has built an automation system with the goal of taking floor cleaning robots from basic remote vacuuming to something a lot smarter. “The barrier to the next level of AI in robotics is not better AI. It’s context,” Angell told me in 2022, just before the Amazon deal was announced. iRobot had been working on using its robots to better understand how we live in our homes. Better for improving the way we clean and perhaps expanding further into the smart home.And that, as I said before, is a big part of why Amazon wants the company.

It is likely that these efforts to make robots smarter and smarter, and pouring money into research and development around intelligence rather than producing more mass-market products like its competitors, are what has put iRobot in its current precarious position.

Its competitors are racing ahead, regularly launching new models at multiple prices with new features that sometimes seem strange (a vacuum with an arm, a robot that can cut hair, another with mops that can cut hair).

Although iRobot hasn’t rested on its laurels, its decision not to switch to lidar instead of vSLAM (simultaneous visual localization and mapping) when the technology became more affordable was a questionable one. As was its slow adoption of the popular disinfection and vacuuming model. The company stuck to its ethos that tasks should be better separated for a very long time (it has a line of robots dedicated to scanning only) before half-heartedly addressing the issue with the j7 Combo in 2022 and, more recently, launching more low-cost robots.

Meanwhile, Roborock, Ecovacs, and Dreame Technology were aggressively creating an all-in-one solution: a robotic vacuum cleaner that could mop, sweep, empty the trash, refill its mop, drain dirty water, clean, and dry. It has its own mop pads, and even attaches to your plumbing so you don’t need to lift a finger. A year later, iRobot responded with the Combo j9 Plus, which has an automatic mop refill base but lacks many of the features touted by its competitors.

While these multi-functional robots may be more of a fad than a trend (time will tell, but a few of them work well and those docks are more work than they look), their lag here puts iRobot in a late bloomer position. Now, struggling for money and with founder Angle exiting, the money guys come in.

The pandemic shock the company experienced while we were all frantically cleaning our homes turned into a catastrophic stumble as revenue plummeted. The net loss for 2022 has more than doubled, and iRobot estimates an operating loss of $285 million in 2023. Last year, it had to borrow $200 million until the Amazon deal closed, with only a $94 million apology from Amazon for pulling out. From the deal, she has to find the rest of that money elsewhere or risk being sold for parts.

The plan includes cutting a third of its staff, closing offices, and cutting research and development by $20 million year over year by offshoring non-core engineering functions. It’s also ditching its line of air purifiers (it bought Aeris in 2021) and its Terra robotic lawn mower (which was never launched in the US), which will put the competition ahead of the curve again. Both Ecovacs and Dreame are shipping robotic lawn mowers to the U.S. for the first time this year, and Ecovacs has a robotic air purifier that it says will be coming to the U.S. soon.

Without substantial R&D, innovative new products, and building on its (relatively) excellent software, Roomba could also go fast as Chinese companies enter and take more market share. These companies make good robot vacuums and innovate quickly, but they have their own problems, including a lack of user repairability (which iRobot excels at) and some privacy concerns.

Angell said this week that he believes “iRobot has an exciting future ahead of it.” With basic robot vacuums quickly becoming a commodity product, the next big thing in home robotics is a leap I’m really excited about. Although iRobot was at the top of the list of companies offering this, I hope to be optimistic about its future.