Amazon’s .7 billion purchase of the company behind the Roomba shows it is focusing on home robots after its first experiment, Astro, was met with mixed reviews

Amazon’s $1.7 billion purchase of the company behind the Roomba shows it is focusing on home robots after its first experiment, Astro, was met with mixed reviews

Roomba i7_Lifestyle_Living room

The iRobot Roomba has been on the market since 2002.i robot

  • Amazon will buy Roomba maker iRobot for $61 per share, or about $1.7 billion.

  • Roomba has boomed in the pandemic era, but sales are down 30% since last year.

  • The deal signals Amazon’s commitment to robotics following the launch of its home robot last year.

Amazon is banking heavily on robots with its latest acquisition.

The e-commerce giant announced on Friday that it is buying iRobot – the company behind Roomba – in a cash deal valued at around $1.7 billion. It’s Amazon’s fourth-largest deal after last month’s $4 billion acquisition of healthcare provider One Medical.

The acquisition is a major coup for iRobot, with the company’s shares closing around $50 on Thursday and Amazon paying $61 per share for a premium of 22%.

Roomba received a pandemic boost as more people were spending time at home, which matched a surge in robot vacuum sales. But supply chain challenges and a drop in orders in recent months have impacted iRobot’s bottom line: In its second-quarter results released on Friday, the company reported a 30% drop in revenue compared to 2021.

To cut costs, iRobot said Friday it was laying off 140 employees, or about 10% of its workforce.

While Amazon may get a deal with iRobot, it gains a popular home device and a wealth of in-home data culled over two decades. It’s a signal that Amazon is committed to robotics, despite mixed reviews for its own home robot Astro.

Amazon has big plans for its little robot

Amazon Astro robots on the kitchen floor surrounded by people talking

Amazon introduced Astro, an autonomous home robot, in September 2021.Amazon

When Amazon introduced Astro in September 2021, it was billed as a home security companion that can navigate your home autonomously.

But even Amazon insiders were divided on the viability of the $1,450 robot: Some employees told insiders at the time that Astro could eventually have the same mainstream success as the Amazon Echo, while others predicted it would fail spectacularly.

Early reviews from Astro – which is still by invitation only – highlighted the robot’s ability to find its way around your space and keep an eye on your home, but noted that the robot mostly just got underfoot and up high price was not worth sign.

Perhaps prophetically, Joanna Stern of the Wall Street Journal remarked that Astro would be more helpful if it could also suckle while zipping around the house.

In fact, even before Astro was introduced, Amazon had big plans for its little robot. An employee told Insider last September that Astro’s long-term goal is to make it the “ultimate personal assistant” that can carry things and do household chores like vacuuming.

The ambitious goals for Astro may stem in part from the high stakes involved: Astro was Amazon founder Jeff Bezos’ passion project, and he was closely involved in the robot’s development before stepping down as CEO.

(In fact, Bezos’ own kids apparently predicted Amazon and iRobot’s 2018 nuptials when they built their own home robot by gluing an Echo and a Roomba together.)

By purchasing iRobot, Amazon gains more than just another device to add to its robotics portfolio. Roomba has been on the market since 2002, which means iRobot not only has a 20-year lead in home mapping and navigation, but also has two decades of customer data that could be very valuable to Amazon’s smart home goals . (A spokesman for Amazon told Insider that protecting customer data is “incredibly important” to the company.)

Now that the Roomba is under the Amazon umbrella, some of those ambitions could take shape.

Ken Washington, who leads the Astro team as Amazon’s vice president of consumer robotics, told GeekWire in an interview last month that the company is “at the beginning of the journey” when it comes to home robotics.

“Astro is our first consumer home robot,” he said. “It won’t be our last.”

Read the original article on Business Insider

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