Amazon has now gotten the go-signal to buy iRobot. The e-commerce company had plans to buy iRobot. But it stalled when the Competition and Markets Authority called for a review.
The government’s competition watchdog checked into the planned takeover. It might give Amazon an unfair advantage over other competitors. But the CMA has now declared that the merger could take place.
According to the agency, iRobot has a modest market in the United Kingdom. It has also faced off against other competitors. It then concluded that the robot vacuum cleaner niche is a small one. There’s a slim chance it will grow much in the future.
The Argument Against the Merger
The CMA was right to voice its concerns. The agency narrowed its misgivings into three areas. The first was whether the company could enter as a competitor. Particularly for the supply of robot vacuum cleaners. The CMA had to consider if they can still do so if the merger doesn’t push through. They also considered if this loss of a prospective competitor will have a big impact.
The CMA also had to look into how Amazon could use its online store to put iRobot’s competitors at a disadvantage. The final issue was whether the Roomba can become a vital input for the smart home platforms. After all, Amazon might eke out an unfair edge over its smart home rivals after the proposed merger.
After weighing all the issues, the CMA has concluded the deal with iRobot should push through. The watchdog declared it wouldn’t result in competition concerns in Britain.
The CMA noted that iRobot’s market position is quite modest. It already went up against key competitors and the Amazon deal won’t have a big impact on market outcomes. The Markets Authority noted that Amazon can use its standing as a top retailer to its advantage. But there’s no incentive to do so and hobble competing robotic vacuum cleaner makers. The market for this type of device is quite low in the UK.
The small niche also means getting iRobot won’t place Amazon’s smart home platform at a disadvantage. It’s because these cleaning devices and the data they collate aren’t vital to the country’s smart home market
Deal Pushes Through
The £1.4 billion ($1.7 billion) deal with iRobot will help Amazon grow its market for smart home appliances.
iRobot is an American tech company. It’s known for designing and building consumer robots. One of its most notable creations is the Roomba robot vacuum. These smart vacuums retail for about £249. Some of the better models can cost as much as £899.
Amazon’s deal with iRobot is reportedly valued at around $1.7 billion. Jeff Bezos’ company will buy the tech firm for $61 per share. It will reportedly be an all-cash transaction.
Dave Limp of Amazon Devices acknowledged that people love iRobot products. He said that he’s excited to work together with the iRobot team. He added that they’ll be inventing ways to make consumers’ lives more enjoyable.
There are still questions about how the robot company will become folded into Amazon. But the multinational firm plans to keep Colin Angle on as iRobot CEO.
iRobot has been around since 1990. The company was then founded by three members of the Artificial Intelligence Lab of MIT. But the robot vacuums were only launched in 2002. It has sold millions since then. And its most popular robot vacuum is the Roomba.
The company launched its newest iRobot OS earlier this year. It’s an AI-powered platform dedicated to robot mops and vacuums. This latest OS is reportedly designed to differentiate Roomba products from its competitors. It’s done via extra software features and capabilities. It’s considered a necessary change. The smart cleaning space is becoming more competitive.
Amazon hasn’t been very forthcoming about its plans for iRobot. Despite the lack of details, experts can tell where the wind is blowing. The company’s efforts with regard to other smart home products hint at what market they’re focusing on.
Amazon introduced its Astro smart home robot in 2022. The $999 device is reportedly an interesting mix between a Roomba and the Echo Show. The latter is a smart speaker display.
The Astro smart home robot is now touted as a new kind of household robot. Amazon described it as a robot for home monitoring. It integrates advanced hardware and software. It has computer vision and the power of AI. You add Alexa to the mix and you have a compelling case for a smart home robot.
The long-awaited smart home assistant robot can reportedly map out floor plans. It can also recognize faces and can listen to commands to move to another room. It can also play music and answer questions like Alexa. It can also show you information like sports scores and the weather.
The latest OS launched by iRobot might not be compatible with a device that’s like an Alexa on wheels. But it’s still an ambitious move. The company’s goal is to have a better understanding of a home through the robot’s smart features. They can then extend it to other aspects of the smart home.
There are concerns about the amount of data Amazon has. The company does have a lot of smart home products on the market. It has Alexa and the Ring doorbells. It will soon be adding the Roomba to the list. It won’t be long before privacy concerns are again raised. Many will also be wary of Amazon’s seeming control over the smart home sector.