This post will explore leading global consumer robot company iRobot and how they have managed to maintain a leading industry position for the last 25 years. Award-winning products such as the Roomba Vacuuming and Braava family of mopping robots have contributed to achieving their principal vision of making cleaning more efficient, equipping people with time to accomplish more in their daily lives.
Products
Arguably, iRobot products offer exceptional levels of convenience which have ensured their consistent popularity amongst consumers. The latest models can be controlled hands-free and automatically empty themselves such as the Roomba i7+ which is armed with automatic dirt disposal.[1] Another one of iRobot’s most desirable features is the iAdapt 2.0 technology and vSLAM navigation which enables the robot to keep track of its location resulting in seamless coordination around the home covering all floors. Furthermore, imprint smart mapping uses sensors and cameras to familiarize robots with room layouts. Products are also able to connect to Wi-Fi with the possibility of setting up cleaning schedules through the companion app or using voice control.
Partnerships
Another key driver in iRobot’s strength is the nature of their collaborations with other tech companies boosting the perceived credibility of their technology. iRobot works closely with Amazon resulting in regular sales and all devices have support for Google Assistant and Amazon Alexa. In a press release this January, iRobot announced a new partnership with integration and discovery platform IFTTT which will encourage innovations of the app and move the company closer to their ambitions for a smart home through IFTTT’s pledge to enable ‘more extensive interaction with other devices in the home’.[2] The potential for a future acquisition has become a topic of interest due to the aggressive push from tech giants to develop their smart product ecosystems. The expansion of ecosystems will boost data volumes enabling tech giants to access multiple channels (see article on Fitbit). Markets Insider suspects that tech giants will be attracted to iRobot’s wide database of specifics about consumer’s homes.[3] Since the major tech players are yet to gain exposure to the consumer robotics industry, a substantial bid from a company such as Apple would be unsurprising to many.
Financial Position
iRobot’s positive financial position has contributed to their ability to thwart competition thus far. Last year, iRobot’s revenues increased by 11% due to the launch of new products. New additions ‘The Roomba s9 Series, the Braava jet m6 Series and international sales of the Roomba i7 Series generated 17 per cent of 2019 total revenue’.[4] iRobot has also been granted a patent for an autonomous cat litter cleaner. Recent performance has been equally indicative of a promising future as the most recent financial statements revealed outperformance in the US where international revenue grew 6% to $179.6 million.[5] This information has been especially powerful in light of new market entrant SharkNinja who claims to be a ‘relentless innovator in the housewares industry’ and has a range of impressive vacuums and kitchen appliances.[6] The sustained performance of iRobot despite recent tariffs, fierce competition and their recent call having the ‘highest implied volatility of all equity options today’, indicates that iRobot appears to be set to sustain its leading position in the industry.[7] Interest from major tech players may also contribute to their strong position.
[1] Erica Katherina, ‘Amazon drops great deals on these iRobot Roomba robot vacuums’, Digital Trends (February, 2020). https://www.digitaltrends.com/dtdeals/irobot-roomba-deals-i7plus-960-675amazon/.
[2] Steve Symington, ‘iRobot is Realizing Its Vision for Truly Smart Homes’, The Motley Fool (January, 2020). https://www.fool.com/investing/2020/01/07/irobot-is-realizing-its-vision-fortruly-smart-hom.aspx?source=iedfolrf0000001
[3] Luke Lango, ‘7 Buyout Targets to Watch in 2020’, Markets Insider (January, 2020). https://markets.businessinsider.com/news/stocks/7-buyout-targets-towatch-for-2020-1028793898
[4] Lucia Maffei, ‘iRobot’s longtime CFO to step down just months after COO departure’, Boston Business Journal (February, 2020). https://www.bizjournals.com/boston/news/2020/02/05/irobots-longtime-cfoto-step-down-just-months.html.
[5] Steve Symington, ‘Why iRobot Stocks Soared Today’, The Motley Fool (February, 2020). https://www.fool.com/investing/2020/02/06/why-irobot-stock-soaredtoday.aspx
[6] https://www.sharkninja.com/ourcompany/#vision-growth
[7] Zachs Equity Research, Yahoo Finance, (February, 2020). https://finance.yahoo.com/news/implied-volatility-surging-irobot-irbt151803178.html
Financial Institutions 1850-2020 