Wednesday, March 30, 2011

Wild ride for IRBT as all-time high looms

It seems like just yesterday I was buying scoops of IRBT at $7 a share. Actually it was more like 30 months ago - but iRobot has been on an absolute tear since then. Despite the recession, the company's revenues and profits quickly rebounded and then hit all time highs, and the stock has followed nicely, roughly matching AAPLs performance in that time (without introducing an iPad I might add).

I can't wait to check out the list of shares held short in about a month. It would take a stomach of steel to stay short from $7 to $30, but all along the way there have been naysayers. Of course, I've been on the other end, buying ever larger amounts of IRBT in its swan dive from $33 to $7, so we have come full circle.

I'd like to hear from the company how their key home market in Japan is doing. And it seems like the nuclear disaster presents a huge opportunity for nuclear response robots. I note that the company has sent 4 military grade robots to Fukushima. But I could imagine a scenario where every nuclear plant in the world has robots on hand for dealing with dangerous levels of radiation. Cost seems to be the only reason why human beings are being sent in harm's way.

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Monday, January 10, 2011

Friday, January 07, 2011

iRobot introduces AVA telepresence robot at CES (!!!)

Didn't expect this so soon: iRobot unveiled its telepresence robot, AVA. The telepresence robot is compatible with iPads and Android devices and is designed to be ready for APPs.

iRobot CEO Colin Angle: "If you can program an iPad, you can program a robot."

The new robot has sonar and mapping, and Microsoft Kinect-style technology.

Here's PC Magazine's interview on YouTube:

Exciting stuff!

This isn't yet a shipping product, so we'll have to see if iRobot can be more successful this time than they were with the ConnectR product, which flubbed both the Roomba form factor (trip grandma, useless in offices, hospitals), and function (no on-board screen).

With the new robot, the tablet device is the screen. Pretty easy upgrades too — just load a new App on your tablet, or upgrade the tablet. I love the modular concept.

Price points are obviously the bugaboo with devices like this one. But there's a lot of potential uses, such as remote medical monitoring. I could also see the government using this at some point. Imagine how many more facilities a government inspector could keep tabs on at once without having to physically go to every location all the time? Executives could get a tour of key facilities without having to travel to China. This could also be a rare instance where a civilian product goes up the food chain to the military and enhance sentry-type robots, powered by the iPad.

Monday, January 03, 2011

NEW Roomba 700 Series, Scooba 230 Announced by iRobot (!)

iRobot Corporation (NASDAQ:IRBT) announced today that it will introduce all new models of its Roomba and Scooba lines at the Consumer Electronics Show (CES). The new Roomba 700 Series robots feature AeroVac II vacuum bin with more power, HEPA filtration, 50% better battery life, and improved dirt detection. The new 700 Series models will cost about double the $249 starting price point for the 500 Series Roomba models. (They presumably will supplant the $599 Roomba 610 Professional, which is basically a dressed up 500).

The biggest deal from my investor's perspective is that the price points are going up, which is good for margins and signify confidence on iRobot's part, and that the company is sticking with its cheaper, simpler algorithmic approach to navigation and eschewing the laser-based navigation approach of Neato Robotics XV-11 Robotic Vacuum as well as a version of the Northstar-style technology employed by the Mint Cleaner from Evolution Robotics. Seems to me this gives *A LOT* of breathing room to its competitors to thrive (and Neato recently got millions in additional capital). But it also could cause profitability to soar as well, and its new contract manufacture could help it scale up to levels we simply have not seen (and competitors may be hard pressed to match).

The company also gets a chance to relaunch its Scooba line, which has never quite lived up to its promise or the popularity of the Roomba, with the new, smaller, Scooba 230 (Promo video from iRobot above). The Scooba 230 is expected to cost around $300. The new model is much smaller and therefore better able to navigate tight spaces, like bathrooms. It also appears much easier to clean and store than its larger siblings. It's good for about 150 square feet and one hour of cleaning at a time, and has a brilliant bladder design that keeps clean and dirty water separate without needing the bulk of fixed chambers. In other words, when the clean water exits, the clean water chamber shrinks, and the dirty water bag expands. All of this is out of sight to the consumer, who merely has to add water, empty dirty water, rinse the dirty chamber, and rinse a removable brush plate on the bottom of the new Scooba 230. Can't wait to get my hands on one, but to my mind, this is going to smoke the Mint Cleaner.

The ability to clean bathrooms could be this little guy's killer app. I've used the Scooba in my bathroom, but it misses large chunks because of its bulk. I and others have postulated in the past that a mini-Scooba could do the trick. I could even see this guy cleaning some tubs and showers, which really need it!

Looks like we'll have to wait a few months to actually get our hands on one, and they will apparently will initially be for sale only direct from iRobot to maximize margins, which is consistent with the company's most recent investor conference report.

Here's the official press release.

Monday, December 27, 2010

Heartland Robotics snagged $20 million in funding

The robotics field is heating up. Heartland Robotics, the company founded by iRobot godfather Rodney Brooks, announced Nov. 30 that they have secured another $20 million in funding.

Can't wait for them to show off their supposedly amazingly cheap and useful products and have an IPO.

Colin Angle disses Neato's XV-11, hints at lawsuits

iRobot CEO Colin Angle gave an extensive interview to where he praises Neato Robotics as a company and calls their laser rangefinder interesting, but ultimately dismisses the Neato XV-11 robotic vacuum, saying that it does not do as good of a job of cleaning as Roomba, because it treats such things as couch skirts as walls and doesn't then clean under the couch.

Angle also said that the company is prepared to vigorously defend its intellectual property when warranted, but tends to wait to see if a product gets any traction in the marketplace before doing that. But, my interpretation of his Neato comments, where he expressed hope that their next vacuum would do better, suggests to me they are not a likely target. But who knows. (Litigation is expensive for smallish companies like iRobot).

Thursday, December 16, 2010

iRobot Stock Nears $24 IPO price as Roombas selling out, SUGV begins shipping

A couple of pieces of excellent news appears to be juicing iRobot's stock, which has come very close to the initial $24 IPO price, which would be a nice milestone for the company. Boeing, the company that markets iRobot's SUGV product to the military, announced that it has started delivering SUGVs under the low rate initial production phase of the brigade combat team modernization program, with plans to send them to Afghanistan in 2012. While the military has recently sent out a request for competitors who can match iRobot's SUGV capabilities, none have appeared to have done so to date.

Also, iRobot's Roomba products appear to be selling well. HSN, one of iRobot's largest retail partners, has sold out of its best-selling model already.

iRobot noted on its last conference call that demand would outstrip supply this year until they brought on another supplier in late December/early January. My guess is that this could skew Roomba products to higher-cost SKUs as customers buy whatever is left on the shelves. iRobot also did not participate in this year's Black Friday specials the way they have in the past; there were no $79-$99 Roombas to be found.

All of that could mean marginally higher profit margins.

Also, because the company has fully hedged next year's nickel needs at favorable prices, the company could be set for an excellent 2011 and beyond, provided they get the SUGV contract that they expect.

Wednesday, November 24, 2010

Will iRobot be a takeover target?

Reuters has an article that points out big defense contractors are buying smaller ones to find growth in a tight funding environment. Boeing, iRobot and Northrop Grumman are mentioned as focusing on unmanned systems, an area prime for growth.


What are you getting for Christmas?

Roomba, or Neato?

Thursday, October 28, 2010

Paging IRBT analysts: Why do you ask such terrible questions?

iRobot's conference call this morning was very, very boring, almost tedious, and I blame the analysts. All they seemed to care about were vague questions about "color" for next year's numbers. Nobody had a truly insightful question, including the obvious ones:
1) How concerned are you about the threats from Neato Robotics, Mint Cleaner, Samsung, and are you worried that they are taking share in stores where they compete head to head (Bed, Bath and Beyond, Hammacher, Amazon)? (There was a question about losing share in the U.S. because of a lack of product supply while they await production from a new contract manufacturer, and Angle said he didn't think they were losing share. But share of what? Share of the robot vacuum market? They most certainly are because their share had been 100% and now it is something less than that. Angle also seemed to put in a possible dig to Neato's apparent early reliability issues by saying how big a challenge it is to build a robot that "stays sold" instead of being returned. But it's sheer negligence not to ask about Neato!)
2) How concerned are you that Roomba and Scooba have gone several years now without a major upgrade, and don't have smart navigation technology along the lines of Evolution or Neato Robotics?
3) The big new Navy contract for next-generation EOD robots is out of sync with iRobot's products, because it calls for a 700 pound class robot and you only have a 300 pound class robot (Warrior). Do you need to rethink your products or can you compete with the products you have?
4) You just announced a new partnership with Northrop Grumman and BAE Systems. You already have a partnership with Boeing. Is there a point at which iRobot could be up for sale, or when you would consider selling off the G&I business, for example?

The only good question I heard was whether they had secured nickel for 2011 and hedged it. iRobot's CFO said that they had already secured a contract for nickel for 2011, which is good news (and something I asked several weeks ago. If they had secured a long-term contract in 2008, when I first started banging the drum on this, they still probably would have saved millions. Alas!)

iRobot Posts Earnings Call Transcript

iRobot (NASDAQ:IRBT) posted the script for the start of its earnings call on its website.

The actual call takes place at 8:30.

The text has a bunch of positives, including growth in South America, strong military orders, strong Roomba orders, and a stronger balance sheet.

Thx, Potts

Wednesday, October 27, 2010

iRobot Reports Strong 3rd Quarter Results, Ups Guidance Again on Strong Roomba Sales

iRobot Corporation (NASDAQ:IRBT) reported its third quarter earnings after the close, and it was another stellar report, blowing away profit estimates with 27 cents per diluted share and upping full year estimates significantly to 80-82 cents a share, far above consensus estimates of 57 cents. Even that could be too low, given that the company has started making a habit of blowing away estimates.
The star of the show continues to be overseas sales of the Roomba, up 58 percent over last year. Domestic sales are still slow, but prices are rising and iRobot's margins continue to expand — an excellent sign. If there was any pressure from new entrants into the field, like Samsung, the Mint Cleaner from Evolution Robotics or the Neato Robotics XV-11, it didn't show up in their report.
Remember that iRobot's report could have been even better if they had enough product on hand; the company has warned that it will not have enough Roomba manufacturing capacity until early 2011 when a new contract manufacturer comes on board.
The military side of the business also is healthy, with a growing backlog.

One thing I though was interesting is that earnings soared even though research and development spending doubled from $3 million to $6 million. That's a very good sign that iRobot is investing in its future and isn't eating its seed corn. The company is basically putting half of its profit back into the business with R&D, and pocketing the other half. I like that ratio.

The earnings conference call is tomorrow at 8:30 a.m. We'll have live highlights.

Colin Angle: "Many, many, many hundreds" of PackBots Killed in Action by Roadside Bombs; Sees Growth in Military Robotics Despite Defense Cuts

Colin Angle
iRobot CEO Colin Angle told Forbes magazine that he sees opportunities for continued growth in military robots even with future budget cuts in Defense spending. The company's robots cost a lot less than other military items (ed: like people), and are proven to save lives. Angle said he doesn't have a precise number of how many PackBots have been killed in action by roadside bombs, but said that it is in the "many, many, many hundreds." Angle figures that every dead robot probably saved multiple lives. (He previously has credited iRobot with saving more than 1,000 lives during an appearance in Japan).

Angle also said that the Roomba business has had particularly strong sales in Europe and Japan, and he's confident that will continue. "Clearly we think that it was not just a shot in the pan," Angle said. (Ed: I think we can expect a good earnings report after the bell!)

iRobot Names Human Resources VP

Russell J. Campanello has been tapped as iRobot's new VP of Human Resources. Perhaps this is a sign they expect more growth?

Coffee Balloon Robotic Hand Co-Developed by iRobot

Coffee-Filled Hand
This latest invention is, frankly, amazing. iRobot and researchers at Cornell and the University of Chicago with funding from DARPA developed a powerful robotic hand using a simple vacuum, a balloon, and coffee grounds. Here's how it works — the coffee-filled balloon is lowered onto an object that needs picking up. The balloon deforms around the object. Then the vacuum is activated, and the coffee grounds suddenly lock together and effectively tighten the balloon's grip. Then the object can be picked up.
I'm sure they can advance this technology to a host of applications. You can already guess the one I'd like to see — A robotic hand attachment for the Roomba that picks up toys, socks, underwear and anything else in its way!

Here's the video:

Popular Science has more.

BAE Systems, Northrop Grumman, iRobot Partner on Ground Combat Vehicle

With earnings due today, iRobot's been coming fast and furious this week with the press releases. Yesterday, BAE Systems and Northrop Grumman announced they are partnering with iRobot on the new Ground Combat Vehicle.

From the press release: "iRobot Corporation (NASDAQ:IRBT) will serve as the unmanned ground vehicle (UGV) integrator and enhance the capability to detect pedestrians and obstacles of interest with growth towards an autonomous driving capability for the GCV.  iRobot will also be responsible for integration of the U.S. Army's Brigade Combat Team modernization program Small Unmanned Ground Vehicle (SUGV) robotic platform so that it can be operated from inside the GCV.
"We are very pleased to be a member of the BAE Systems-Northrop Grumman GCV team," said Robert Moses, president of iRobot's Government and Industrial Robots division. "Together we offer extensive experience in combat platform production and robotics integration capabilities to the GCV program. The GCV is an extremely important program for the Army and today's soldier. We are proud to be part of a team that looks to develop the U.S. Army's next generation combat vehicle."
For investors, this is double-barreled news. It gives iRobot a new and unexpected revenue stream, and perhaps more importantly, makes the company even more valuable as a potential takeover target. The company now has key partnerships with several of the biggest defense contractors in the world. I simply can't imagine one of them NOT wanting to buy iRobot in the next couple of years when faced with big cuts to defense budgets around the world (except the Middle East and Asia). In a shrinking market, iRobot's business has the potential to keep growing, and technologies like Awarehead can be transferred to a host of other autonomous and semi-autonomous robots.

Monday, October 25, 2010

iRobot gets $1.82 million in Seaglider contracts

Seaglider, iRobot's chief ocean-monitoring robot, has received two contracts worth $1.82 million combined, iRobot announced a few minutes ago.

While any contract here is good news, to date the company's multi-million-dollar investment in oceangoing robots has yet to pay off. The company lost out on a major Navy contract a while back. I think there is still potential here, given the Seaglider's really cool features — it's ability to remotely operate up to 10 months at sea and it's ability to be fitted with various sensors, such as picking up submerged oil in the Gulf of Mexico after the Deepwater Horizon disaster.

But, there is more competition in this space than in iRobot's chief land robot market, less urgent a need than dealing with roadside bombs and the like, and no true killer app yet that would turn this into a huge market.  Perhaps a global climate system with hundreds or thousands of Seagliders monitoring everything from salinity to acidity to ocean temperatures? If we had a legitimate naval threat like we had during the Cold War, I could imagine Seagliders being used as a movable sonar array. But that doesn't seem to be a priority with the focus on insurgencies and missile defense.

The company has also done some work on robotic boats, which could be used for patrols and the like, but does the Navy, dominated by ship captains and former ship captains, really want to give up the glory of human-piloted ships? I doubt it, even though it makes tremendous sense. The boom in submersible robots instead seems like it will be focused on the offshore oil production industry — an industry where iRobot doesn't really have a foothold yet.

Saturday, October 23, 2010

Colin Angle interviewed by Wired

iRobot CEO Colin Angle was interviewed by Wired this week and expounded on several topics, including his friendship with Google co-founder Larry Page (Angle was at Page's wedding), who he credits with Google's "gratuitous" robotic vehicle venture, his vision for providing most health care in the home via telepresence robots and sophisticated sensors, and his disdain for robotic toys.

Worth a look.

Wednesday, October 20, 2010

iRobot Playing Key Role Developing Advanced Robotic Arm for DARPA

DARPA's reference robot
IEEE Spectrum has a well-done, in-depth report on DARPA's advanced robotic manipulator arm project at this link. The project includes various teams competing to provide the best hardware and software on the project, but iRobot Corporation (NASDAQ:IRBT) is the only private company competing, and one of just two teams competing in both hardware and software categories. DARPA is providing funding, including delivering expensive robots to each of the teams to work on and compete with.

The article and interview with the DARPA manager also is fascinating for its talk of the importance of bringing down the cost of robotic manipulation and dealing with the vastly more complicated tasks like picking up pieces of paper or handling wires on an IED. The idea is to get the robot to constantly correct for errors based on visual and other cues the way a human does. This could obviously have major benefits for a variety of robotic uses both military and civilian, so we'll keep an eye on it.

Monday, October 18, 2010

Gold-Plated Roomba Robot Shown during iRobot CEO Colin Angle's Visit to Japan

Bling is back, I guess. I never thought I'd see a 24K-gold Roomba, until now. I mean, it's a vacuum cleaner people! Aren't we supposed to be in a recession? Isn't gold at like $1,400 an ounce?
24K Gold Plated Roomba
The pictured gold-plated Roomba, which looks like a modified Roomba 560, was shown during a recent visit by iRobot CEO Colin Angle to Japan (Google translated Japanese page).

The translation is a bit glitchy, as you might imagine. It says that the "Rumba" has sold 500 million copies in the U.S. (the real number is 5 million worldwide). Colin Angle also talked about the company's focus on building nursing robots, Japanese robotics' tendency to build robots that are only targeted at the luxury market, and the coming wave in future decades of robotic replacement parts to augment the body parts you already have, like arms, legs, eyes, etc., which Angle suggests would largely be a market for the rich.

Japan has become iRobot's second-largest market after the United States, with sales booming recently as part of a hugely successful international rollout of the Roomba 500 series.

Along with last-week's media event in New York, Angle and iRobot seem to have really stepped up their marketing efforts of late. Now, if they would only hurry up and release a 6th generation Roomba with navigation, or a robotic lawnmower under $1,000, I'd be happy.