NEW YORK — Amazon has agreed to acquire vacuum cleaner maker iRobot for around $1.7 billion, picking up another company to add to its collection of smart home appliances amid broader concerns from monopoly advocates and privacy regarding Amazon’s market power and ability to deepen insight into consumers’ lives.
iRobot sells its products worldwide and is best known for the circular-shaped Roomba vacuum cleaner, which would join the voice assistant Alexa, the astro robot and Ring and other security cameras in the list of smart home features offered by the Seattle-based e-commerce and tech giant.
The move is part of Amazon’s bid to own some of the home space through services and accelerate its growth beyond retail, said Neil Saunders, chief executive of GlobalData Retail. . A slew of home cleaning robots are adding to the company’s tech arsenal, making it more involved in consumers’ lives beyond static things like voice control. Roombas’ latest lineup uses sensors to map — and remember — a home’s floor plan, offering a wealth of data that Amazon could potentially integrate into its other products.
Amazon’s Astro robot, which helps with tasks such as setting an alarm, was unveiled last year at an introductory price of $1,000. But its rollout has been limited and received a lackluster response.
Amazon hasn’t had much success with household robots, but the acquisition of iRobot and the company’s strong reputation in the market offer a “massive foothold in the consumer robot market” that could help Amazon replicate the success of its Echo line of smart speakers, Lian Jye said. Su, robotics industry analyst for ABI Research.
Su said it also illustrated the shortcomings of consumer robotics vendors like iRobot, which was struggling to grow beyond a niche product and was in a “race to the bottom” competition with Korean manufacturers. and Chinese offering cheaper versions of a robot vacuum.
On Friday, iRobot released its quarterly results. Revenue fell 30%, mostly due to order reductions and delays, and the company announced it was laying off 10% of its workforce.
Amazon said it will acquire iRobot for $61 per share in an all-cash transaction that will include iRobot’s net debt. The company has total current debt of approximately $332.1 million as of July 2. The deal is subject to shareholder and regulatory approval. In the end, iRobot CEO Colin Angle will remain in his post.
Noting that iRobot has been running its robotics platform on Amazon AWS cloud service unit for many years, Su said the acquisition could lead to greater integration of Amazon’s voice recognition and other capabilities in vacuum cleaners.
In afternoon trading, iRobot shares were up 19%. Those of Amazon fell by 1.7%.
The deal comes as monopoly advocates continue to worry about Amazon’s growing dominance. The purchase of iRobot is Amazon’s fourth-biggest acquisition, led by its $13.7 billion deal to buy Whole Foods in 2017. Last month, the company said it would buy primary care provider One Medical in a deal valued at around $3.9 billion, a move that extended its reach to healthcare.
On Friday, groups advocating tougher antitrust regulations called on regulators to block the iRobot merger, arguing it gives Amazon greater access to consumers’ lives and cements its dominance in the smart home market.
“The last thing Americans and the world need is for Amazon to suck up even more of our personal information,” said Robert Weissman, president of progressive consumer rights group Public Citizen.
“It’s not just about Amazon selling another device in its marketplace,” Weissman said. “It’s about the company getting even more intimate details about our lives to gain an unfair advantage in the market and sell us more stuff.”
Landmark antitrust legislation targeting Amazon and other big tech companies has languished in Congress for months as prospects for votes by the entire Senate or House have dimmed.
Last month, Sen. Amy Klobuchar, D-Minn., who heads the Senate Judiciary Antitrust Committee, urged the Federal Trade Commission to investigate the acquisition of One Medical, as did other critics who called on regulators to block the purchase. on concerns about Amazon’s past conduct and potential implications for consumer health data. Regulators also have the discretion to challenge Amazon’s $8.5 billion takeover of Hollywood studio MGM, which was finalized earlier this year.
Founded in 1990 by a trio of Massachusetts Institute of Technology roboticists, including Angle, iRobot’s early ventures led to rovers capable of performing military and disaster relief tasks following the 9/11 attacks.
Profits from defense contracts allowed iRobot to experiment with a variety of other robots, producing misfires and a huge commercial success: the first Roomba, introduced in 2002, which pioneered the automated vacuum cleaner market.
The company spun off its defense robotics division in 2016 to become almost exclusively a seller of vacuum cleaners and a few other home robots, like the Braava robotic mop. He planned to launch a robotic lawn mower in 2020 but backtracked, citing issues related to the pandemic.
AP Technology Editor Matt O’Brien contributed to this report from Providence, Rhode Island.
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