Amazon set to acquire Roomba developer iRobot for $1.7 billion

Yahoo Finance tech reporter Dan Howley highlights Amazon's plans to purchase iRobot as the online retailer expands into the home appliance space. Read More...

Yahoo Finance tech reporter Dan Howley highlights Amazon’s plans to purchase iRobot as the online retailer expands into the home appliance space.

Video Transcript

DAN HOWLEY: Speaking of steps in a different direction, or in the right direction, I’m looking at Amazon, and specifically their purchase of iRobot. That’s the company that makes Roomba, the famous robot vacuum cleaner that’s been around seemingly forever but really hasn’t. Now, there’s two reasons why this is an interesting deal outside of the fact that it’s $1.7 billion and one of Amazon’s largest acquisitions. The first is that it gets more people to want to sign up for Prime. That’s what they do with all of their devices. The reason why they have an Echo speaker, an Echo smart screen, it’s all about getting you to sign up for Prime, because when you get a device like that, you use Prime Music, you can purchase items through Prime easier. So it all is basically just one big techno funnel to get you to be a Prime member.

Now, the other thing that’s interesting about this is that Amazon is now bringing robots in, but it’s not their only robots that they’ll have when the deal closes. They already have a robot called Astro. That’s only available for purchase by invitation. It costs $999 right now if you do have an invitation, but eventually it will cost much more– $1,499 when you do buy it.

There’s been reviews of the Astro. I haven’t gotten to use it myself. A lot of people basically say it kind of doesn’t really have its own purpose yet, but it is interesting. It can be a little bit frustrating at times. It does act as kind of a sentinel that can patrol your house at night. It will let you send things to other people in other rooms, things along those lines. But it’ll be interesting to see Amazon use the technology from Roomba and iRobot to improve its own robotic capabilities in the home.

Yeah, and perhaps a third reason to add is they get their talons more in the consumer as they dive deeper into your home. This thing, to your point, Astro follows you around your home. It has Alexa built in. Built-in thermometers, built-in microwaves, and apparently the Ring camera as well. Quite frankly, a little bit creepy for the consumer that they are getting further into our home, Seana, but iRobot, they are getting at an interesting time with revenue down 30% in the quarter. They just laid off 140 employees, so they’re certainly buying them on a downside. Looked like a pandemic darling. But I’m just curious, your take, Seana, on Amazon being in our homes with us.

SEANA SMITH: Being in our homes. Almost being in every aspect of our lives, right, Dave? I mean, they also recently announced the plans to acquire One Medical, pushing further into the health care space. Now plans here with iRobot, and we know they have made a number of acquisitions, to say the least, over the last couple of years.

It will be interesting to see what they do with it, and Howley, I like your explanation just in terms of the progress that they could potentially take with these robots. It is a little concerning. I’m still worried– I don’t even have Alexa in my home, and I’m not really one of those people that are paranoid. I don’t know, maybe I am. Maybe that reveals something about myself that I don’t really know, but I don’t know. It just makes me a little uncomfortable at this point.

Global dominance is in their sights. Whole Foods, they’re going to have their own grocery store soon. We go on.

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