The name iRobot might not
be as well-known as its main product, the Roomba,
which has been made popular in part by
shows like American Dad, Arrested Development and
Gilmore Girls. Did you put googly
eyes on the Roomba? I just find my housekeeper,
but I've already found a replacement. You know if we
died right now and decomposed, it would
vacuum us up. The company just launched some
big updates to its product line, including a
new mopping robot called the Braava jet m6. It also will soon release
a lawn mowing robot named Terra. iRobot is building a
complete home cleaning robot fleet so you never have
to mow, mop or vacuum again. But since the
beginning, iRobot has dealt with competition and knockoffs
— lots of them. And now, with higher tariffs
on goods produced in China, iRobot has to
stay more vigilant than ever. CNBC got an inside look
at its lab to see the latest products in
development and to learn more about its goal to
have a self-cleaning home filled with robots to take
care of our dirty work. iRobot has had a material
impact on the market by creating it, in
my opinion. The Roomba began cleaning
homes in 2002, but iRobot was quite
busy before then. iRobot was founded back in
1990 based on the notion that it was about
time that these robots that we had been
promised became a reality. When Colin Angle co-founded
iRobot, the company was focused on
military robots. It then started making
toy robots and lessons from both led the company
to create the first robotic vacuum. Everyone thought of Rosie
the Robot from The Jetsons and this idea that
the thing that robots were supposed to do for
us in our everyday life was clean the house. It wasn't hard for us
to recognize that this was a good idea, we just didn't
know how to do it. And the Roomba actually
was the coming together of technologies from work we
had done in the toy industry, learning to make
low cost complicated devices; from the defense
industry, where we had designed algorithms that would
allow a robot to go sweep a minefield. And so the algorithms on
Roomba that make sure it goes everywhere in the
room actually were mine-hunting algorithms. A couple of years later
in 2002, we launched the first Roomba. Roomba robotic floor vac. If it's down there,
we'll get it. This is the original
Roomba called Scamp. It wasn't yet a vacuum. It had a little bit of
a sweeping system on the inside. Here's the
original Roomba. This was the first Roomba
that was launched and sold. Worldwide sales of
consumer robots reached 5.6 billion dollars in 2018,
and it's expected to reach 19 billion dollars by
the end of 2025. And that's in no small
part thanks to iRobot, which has a market
cap of 2.5 billion. iRobot is one of the
first companies to offer a product that does the
automation of domestic tasks in the home. And so I think it is
a market leader. It is a pioneer. And people get really
attached to these autonomous cleaning machines. Humans have an amazing
ability to anthropomorphize almost anything. Probably within three weeks, 90
percent of Roombas have been given a name or are
called Roomba as if it were their name, and
a bond appears. We'll get these phone
calls to customer service. My Roomba is broken. Send it back we'll send
you a new one. No. No, I'm not
sending you Rosie. Can't you send
out an ambulance? Which is a bit
different from most consumer-product
interactions. The newest addition to
the iRobot family of cleaners is the Braava jet
m6, a mopping robot that has a larger
tank and improved connectivity over its predecessor. For the first time ever, we
have what we call our iAdapt 3.0 navigation technology. So not only does it map
your home, it also learns your home. We've expanded the range,
so now instead of cleaning a single room,
it can actually clean your whole home up
to 1000 square feet. And we have much larger
pads and much better cleaning performance. This is the wet single-use
pad and the robot automatically knows what kind
of pad is on there, so it'll have
the correct behavior. If it's a dry sweeping
pad, it knows obviously enough to spray water. If it's a wet pad, it
knows to spray, but it also knows to notify you if
you don't have water in the tank. Some concerns about privacy
have been raised, though, as newer iRobot
products map a user's house in order to clean
it more accurately, and that data can
make consumers uneasy. Privacy concerns associated
with these household robots are common
across all consumer electronics. So, in order for Roomba
to vacuum the kitchen, it actually needs to know
where the kitchen is. And, you know, that's
some information which the users need to feel
in control of. If you don't want us to
collect the data in the first place, you don't have
to go give us permission to do so. The robot just won't
know where your kitchen is. It will still
vacuum very, very well. But now more than ever,
between the long list of similar, cheaper products,
and the escalating trade battle with China, iRobot
has to make sure consumers know what sets
its products apart from the long list
of similar products. Naturally, there have
been copycats. So the question for iRobot
is, how does it maintain a distinct
competitive advantage with its existing product line,
and how does it continue to expand into
other product lines? 25 percent of all money
spent on vacuum cleaners are now spent on
robot vacuum cleaners. The Roomba is the
number one selling vacuum cleaner in the United
States, which is amazing. And of course that's
invited in and attracted copycats and competition
into the marketplace. One of the lessons
that our competition always learns very quickly is that
building a robot is really hard. Trying to build a robot
at lower prices often leads to robots that don't
have the durability or effectiveness. Perhaps even it might
be worthwhile to explore other products that would
be integrated into these products, just like
what Apple has done with its products, to be able
to make a very high barrier to switching over
to other competing products. iRobot has had to deal
with tariffs before, in 2018 when the U.S. enacted a 10 percent
tariff on products produced in China. Back then, iRobot decided
to absorb the higher cost of its products, but
today it might have to find another way. The tariffs and the
recent increase is very challenging for the
consumer robot industry. You know, these tariffs are
not free, they're not paid by China. They're largely paid
by the U.S. consumer. That makes this
great new technology more expensive and slows down
the growth of this new industry. iRobot continues to
innovate through the challenges. Along with the
new Braava mop, iRobot has also previewed Terra,
its lawn mowing robot which will start selling in
Germany this year and will enter beta testing
in the U.S. this year as well. Terra is finally, we've been
working on this thing for 10 years,
is finally launching. With these three horsemen,
the Roomba, the Braava and the Terra robots, we
could see a much larger business in a few years. Companion robots have
revolutionized many things, from cleaning our houses to
mowing our lawns to keeping us company. You're hungry. And iRobot wants to stay
at the forefront of this revolution. We've created a new
level of intelligence because we know where we are
and we're starting to know where things are. It's like a whole new
chapter in robotics was just begun. And so for me, for
iRobot, it's a very interesting time.
