Amazon broke the news in August that it plans to buy Roomba-maker iRobot to the tune of $1.7bn, a deal analysts believe is motivated by the online shopping giant’s aspirations to become a leader in robotics.
Completion of the transaction is subject to customary closing conditions, including approval by iRobot’s shareholders and regulatory approvals. On completion, Colin Angle will remain as CEO of iRobot.
“We know that saving time matters, and chores take precious time that can be better spent doing something that customers love,” Dave Limp, SVP of Amazon Devices, said about the deal.
“Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive – from cleaning when and where customers want while avoiding common obstacles in the home, to automatically emptying the collection bin. Customers love iRobot products – and I’m excited to work with the iRobot team to invent in ways that make customers’ lives easier and more enjoyable.”
So why did Amazon agree to buy iRobot? There has been several answers to that question. Bloomberg reported that the acquisition would empower Amazon to better map out people’s homes.
Others, suggest that it would help companies achieve both of their goals in different ways. One of them is Snigdha Parida, senior analyst at analytics company GlobalData.
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“Despite iRobot’s longevity and brand leadership in high-tech home robots, it has remained a mid-sized enterprise,” Parida, says in a new podcast from the research firm. “It has also experienced supply chain disruption throughout the pandemic. Amazon’s sophisticated logistics ecosystem will help iRobot overcome these challenges and the acquisition will also help Amazon to develop further logistics capability as the company attempts to bring robots into mainstream home applications.
“Robotics is a fast-growing industry, with GlobalData predicting that the global robotics market will reach $568bn by 2030. Moreover, the consumer robotics segment will reach $70bn by 2030, having grown at a compound annual growth rate of 29% between 2020 and 2030.
“Amazon has aggressively built its robotics ecosystem since it acquired Kiva Systems in 2012. iRobot will enhance its presence in the consumer robotics category and accelerate its plans to add robots to its existing automated home product portfolio, such as the Echo range of smart speakers and Ring smart doorbells.
“However, the purchase of iRobot might raise monopoly concerns from regulatory bodies, given Amazon’s increasing strength in consumer robots. Privacy concerns and security risks around personal data are also potential obstacles.
“GlobalData predicted that iRobot would be a takeover target in 2022 and that Amazon was one of the potential acquirers in its report, ‘Mergers and Acquisitions (M&A) in Tech, Media, & Telecom (TMT) 2021 Themes’.”
GlobalData is the parent company of Verdict and its sister publications.