Amazon to acquire iRobot for $1.7 billion

NEW YORK—Amazon announced Friday an agreement to acquire robotic vacuum cleaner maker iRobot for approximately $1.7 billion dollars, thereby expanding its collection of smart home appliances amid widespread concern about its market dominance.

iRobot sells its products worldwide and is best known for its Roomba circular vacuum, which would add the Alexa voice assistant, the Astro robot and iRing security cameras to the list of home products offered by the cyber trading giant.

The move is part of Amazon’s efforts to own parts of the home through services and accelerate its growth beyond retail. opined Neil Saunders, managing director of GlobalData Retail. A series of automatic vacuum cleaners add to the company’s technological arsenal, which will further involve it in the lives of consumers, beyond static products such as voice-controlled ones.

Amazon’s Astro robot, which helps with tasks like setting an alarm, launched last year with a starting price of $1,000, but its market reception has been slow and cold.

Amazon hasn’t had much success with home robots, but the iRobot acquisition and the company’s strong reputation in the market will give it “a huge foothold in the consumer robot market,” which could help. Amazon to replicate its success with its Echo line of smart speakers, said Lian Jye Su, industry analyst for ABI Research.

It added that the purchase further illustrates the problems for sellers of consumer robots like iRobot, which has struggled to expand beyond a niche product and has been in a “race to the bottom” with Korean and Chinese manufacturers, which offer cheaper versions of automated vacuum cleaners.

On Friday, iRobot reported its quarterly results. Revenue fell 30% mainly due to order reductions and delays. The company announced that it was laying off 10% of its workforce.

Amazon said it will acquire iRobot for $61 a share in an all-cash transaction that will include iRobot’s net debt.