The company that popularized robot vacuum cleaners around the world filed for Chapter 11 bankruptcy. iRobot, the maker of the Roomba, has been synonymous with the category since its inception, but its star has dimmed in recent years. The company plans to sell its assets to its main supplier, China's Picea Robotics, in hopes of maintaining its business.
Everyone has a strong opinion as to why iRobot fell from grace. Rugged individualists accuse limp regulators on both sides of the pond (and their hatred of big tech) for blocking an attempt to buy Amazon in 2023. hardware Sides of the fence are talking about iRobot's refusal to use LiDAR for navigation until this year left him behind his rivals.
There are also geopolitical experts who can point to China's industrial potential. policysubsidies and favorable regulatory environment compared to the US approach. After all, iRobot's American hardware is made in Vietnam, which now faces a 46 percent import tax. How BBC News This reportedly increased iRobot's costs by approximately $23 million and increased the price of its hardware.
The real answer is that iRobot's demise was caused by a combination of all of these factors hitting the company. More importantly, iRobot's situation is in no way unique and should serve as a warning to every major American tech brand. It's also a lesson in why companies need to address existential threats when they have the time and money to do so.
For example, once iRobot perfected the Roomba concept, the first examples soon burst onto the scene. iRobot had the brand and the know-how, but that only applies to well-motivated copycats. Think about Samsung's first Android phones and how quickly they went from iPhone imitations to class-defining devices of their own. how Apple fought in court to prevent this.
Even before this year's tariffs, iRobot struggled to compete on price, as we've seen in other areas. Think Fitbit before it was bought by Google, which happily sold $80 fitness trackers for years until Xiaomi grabbed the low-cost portion of its business. Even if the first MiBands weren't very good, you could buy three for the price of one Fitbit Charge. Yes, the debate about quality and reliability is important, but it is often not as loud and compelling as a competing product selling for a fraction of the price.
iRobot should have either worked harder to offer a low-cost model to undercut its competitors, or, more likely, ditch the lower tier altogether. Earlier today I checked the local retail store listings for Roombas and its closest competitors. Next to it stood a Roomba 405 Combo with a docking station and a Roborock Q7 L5+ – both capable of vacuuming and mopping the floor. The first is currently on sale directly from iRobot for $400, while the second is currently on sale for $220. I'm sure many buyers would see the price difference and choose the cheaper model.
I'm not going to throw too many Told You So messages over the iRobot fence for not adopting LiDAR sooner. His omission was a mistake, but one could understand why he was embarrassed to abandon the existing setup. But the company forgot one key mantra about the tech world: Andy Grove's maxim that “only the paranoid survive.” Even the fanciest and most expensive Roombas have felt a generation behind competing products over the past five years.
And at the risk of sounding like a marketing guru, it was never clear what an iRobot or a Roomba was. As companies flooded the market with cheaper models, iRobot needed to clarify what they meant when you bought a Roomba instead of a regular model. What did it have to offer beyond the name and history that set it apart from its cheaper competitors? Companies like Apple and Dyson demand a premium, but you almost always know what you're getting for your money.
All I can say is that it is good that there is currently no other US company in a similar position. I Certainly I can't remember a controversial American company making things on wheels that have historically been rejected Lidar for its autonomous services. One that has a brand that doesn't mean much, or whose identity is too closely tied to the personality of its CEO. The one who looks into the barrel at the raft better equipped and often cheaper Chinese alternatives. Because this company will probably face a similar fate in about ten years.
