iRobot Corporation (IRBT)

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iRobot's Angle shares more than just revenues

Last year was bittersweet for iRobot Corp. The company celebrated its 10-year anniversary of its Roomba home vacuum robot and had to shut down its site in North Carolina and cut some of its workforce.
The Bedford, Mass.-based robotics business, like many defense contractors, had to prepare for the impending federal defense cuts. The defense side of iRobot’s business was at one point iRobot’s bread and butter. While it was still 60 percent home robot and 40 percent military in the 2006-2007 time frame, the money delivered to the organization was such that 80 percent was from military side of the business.
Now, that’s changed.
“We’ve seen a tale of two cities in the other direction earlier in our history,” iRobot Co-founder and CEO Colin Angle told Mass High Tech. The reduction in defense was not planned, and the increase in focus on the home robots side of the business was based on a very definite and independent plan to do everything the company could do to profitably grow the home robot business, according to Angle. Part of that focus meant the company had to take action and reduce resources being spent on defense. That equalled layoffs and the closing of the North Carolina site.
“That was very painful for us to do at the end of last year, but allows us to go into 2013 with a plan in place whereby we can have positive gross margins on the defense side,” Angle said.
Still, iRobot said it is not giving up on the defense business and plans to ride it out.
“It’s part of who we are and what we do,” Angle said. “Washington needs to figure out how it will get through the fiscal challenges and equip soldiers with the equipment they need.”

There is crucial investment the defense side, according to the company. Angle said the company is particularly focused on the First Look robot, a lightweight, throwable robot that can be used in confined spaces. One of technologies iRobot has added to it is mesh networking. “Some of technology that has been added to First Look is getting positive reaction from sponsors in the Pentagon,” he said.
The company was down $100 million in defense last year, but Angle said it made it up on much stronger than anticipated home robot sales. In fact, the company’s Roomba 700 series was the growth driver in 2012, and Angle said the company has invested significant time and money in marketing and strengthening its partnerships with retailers, including Bed Bath & Beyond, Kohls and Amazon.
While the decline in defense has been bitter, the sweet success of selling 9 million Roombas internationally has changed things for iRobot. The company says it has created a category in the small domestic appliance market. The plan is now to spend more research and development dollars in the home robot arena, since 90 percent of the business is now from home robots and only 10 percent from defense.
A major area of development for iRobot is the remote presence business unit, which is focused on the recently-approved (by the U.S. Food and Drug Administration) RP-VITA robot. The plan is to bring a similar robot in the home one day in an effort to expand independent living at home.
While it will cost $4,000 and $6,000 per month to lease the system - which includes a tablet, software, apps, a backend system and, of course, the robot - the in-home version would have to be affordable for the masses, according to Angle.

iRobot is a success story in its co-founders’ eyes, and Angle said he will continue to build the robotics industry - especially since five companies were founded by former iRobot employees.
“I’m very happy to spend time and energy giving advice to other robotics companies, and I’m also a big believer in building a robotics industry in Massachusetts.”
Fast facts about Roomba

iRobot shared some of its fun, fast facts about Roomba
Pounds of dirt collected by Roomba: 2.1 billion
Square meters covered:156 billion or the equivalent of 80 million Madison Square Gardens and 39 Rhode Islands
Distance travelled: One Roomba travel 704.6 miles in its lifetime
Weird things its picked up: snake, mice, thousands of LEGOs, lizards and coins from around the world
Names used for Roomba: Rosie, Robbie, Klaatu, Fido, Mona, Boogy, Flo, Zoomba, Charlie and Quinn
Ridden by: cats, dogs, babies, hamsters, ferrets, prairie dogs and turtles

http://www.bizjournals.com/boston/blog/techflash/2013/02/irobots-angle-shares-more-than-just.html