It’s been an up-and-down couple of years for the godfather of local robotics companies. Now, Bedford-based iRobot is working to reinvent itself as it copes with an array of challenges.
IRobot is waging multiple patent fights with its toughest rival, while paying hefty US tariffs to import its Chinese-made products, even as the ongoing supply chain crisis hammers the company with a massive increase in shipping costs.
“Between tariffs, chip shortages, and shipping costs, we’re feeling a little black and blue right now,” cofounder and chief executive Colin Angle said in an interview.
But the company’s betting on continued innovation to keep it out in front. The newest of its Roomba vacuum cleaners are smart enough to recognize and avoid household hazards such as dropped socks and animal waste. There’s now a handheld iRobot mini-vacuum for sweeping out areas a Roomba can’t reach. The company in November spent $72 million to acquire Aeris, a Swiss maker of home air purifiers. That’s part of a long-term plan to integrate iRobot’s “smart home” software into an array of household gadgets.
Then there’s iRobot Select, a new service that lets consumers rent a cleaning robot for a monthly fee instead of buying it outright. With some Roomba models priced above $1,000, iRobot Select could boost demand for the company’s most costly and profitable machines. And the subscription model could turn first-time users into lifetime customers, while leaving competitors high and dry.
With its Roombas, iRobot still dominates the market for home cleaning robots, but it’s been getting clobbered in court. The company last year suffered a series of losses in a patent suit filed against archrival SharkNinja, which is based in Needham and makes home appliances.
But iRobot, which began life in 1990 as a supplier of robots to the US military, is still in the fight. The company is appealing the patent rulings.
“We’re going to strenuously object in court against those who would try to take the hard-won inventions that iRobot has pioneered,” Angle said.
The company has also carried the fight to the US International Trade Commission, arguing last week that SharkNinja is violating still more iRobot patents.
“It’s an unfair trade practice to import into the United States a product that infringes a US patent,” said Louis Tompros, an intellectual property specialist at the law firm WilmerHale and a lecturer at Harvard Law School. Tompros said iRobot could win a judgment banning the importation of any SharkNinja product that infringes an iRobot patent.
In a statement issued after the trade commission hearing, SharkNinja’s chief legal officer Pedro J. Lopez-Baldrich said, “We strongly believe in the merits of our case and are confident that we will prevail against iRobot. SharkNinja is fully prepared for any outcome from this litigation and we will continue our focus on creating 5-star products that improve people’s lives.”
IRobot’s recent challenges started well before the COVID-19 pandemic hit.
In 2019, when the bulk of its production was based in China, the company was rocked by a 25 percent tariff imposed by the Trump administration. That tariff was put on hold temporarily, and in 2020 iRobot got a $57 million refund. But last year, the exemption ended, and the company expects to pay $43 million in 2021 tariffs. Angle said the burden will fall to “the mid-teen millions” this year as the company shifts manufacturing to Malaysia. He said that eventually no iRobot products for North American will be built in China, though products for sale in other markets will still be Chinese-made.
In 2020, COVID lockdowns shuttered the brick-and-mortar retail stores that were responsible for about 55 percent of iRobot’s sales. But being stuck at home worried about an infectious disease apparently made consumers more safety-conscious. So online sales of iRobot’s products surged, and overall sales increased 28 percent in the fourth quarter of 2020.
But then came the global shortage of computer chips. “IRobot found itself unable to build all of the robots that we needed,” said Angle. “We literally were redesigning the robots to take advantage of the chips we could get.”
And then came the shipping crunch. Angle said that shipping a container from Asia to the United States cost $2,000 at the start of 2021, but $20,000 at year’s end. And even then, containers might sit for weeks waiting to be unloaded.
IRobot’s stock took a beating, about 20 percent over the past year. Even so, iRobot’s revenues for the first nine months of 2021 topped $1.1 billion, up 25 percent from the same period of 2020. “In the midst of COVID, they were doing very well,” said Ben Rose, an investment analyst at Battle Road Research in Lexington.
IRobot’s next act will feature a greater focus on raising the IQ of Internet-connected homes. About 12.5 million owners of Roomba vacuums and Braava robot mops have connected their devices to the iRobot cloud, which stores the digital data collected by each robot. These customers collectively use their robots 15 million times a week. Thanks to the cameras and other sensors on these devices, iRobot collects 12 terabytes of data from these homes every week. The data, which is kept confidential, is used to train and improve Genius, iRobot’s artificial intelligence software.
With Genius software, each iRobot device generates a digital map of its surroundings, as well as a kind of lifestyle map of its users. It identifies areas of a floor that may need extra cleaning, like the area next to the kitchen counters. It can automatically suggest the best times to clean different parts of the house, like doing the kitchen floors right after dinner, or the living room at noon, when nobody’s at home.
IRobot’s newly acquired air purifier system will be Genius-enabled, so it can be trained to run full-blast when the house is unoccupied, but dial back to whisper-quiet operation at night.
It’s all part of a broader vision for smart homes. Angle said that iRobot Genius could someday integrate with smart devices from many other manufacturers, serving as an all-in-one control system. If the household Roomba knows there’s nobody home, for example, it could send a command to activate the home security system, turn down the thermostat, and speed up the air purifier, all automatically.
And the high-end Roomba managing all these services might be purchased through iRobot Select. The service, which is still in testing, costs $29 a month plus a one-time activation fee of $99 or $199, depending on which Roomba model the customer chooses. It includes free supplies such as replacement brushes and dust filters, plus the right to get an upgraded robot every three years.
It remains to be seen how big the smart-home market will be for iRobot. Angle said it’ll be at least a decade before we see domestic robots capable of folding laundry or washing the dishes. But rather than home robots, Angle wants to move deeper into designing robot homes, where every function is automated, and all under the control of iRobot software.
“I want to think about the home,” said Angle, “as if it were a robot that I lived in.”