This is HUGE news, and HUGELY BAD for iRobot, sad to say folks. Robotic FX, essentially a startup run by a former iRobot engineer, just swiped a BLOCKBUSTER $279 MILLION defense contract out from under iRobot's nose! Defense News covers the deal at this link. Jameel Ahed, president of Robotic FX and a former iRobot engineer, is quoted: “This procurement was competed on a two-step technically acceptable, low price basis and we are very excited to have won. We look forward to producing our high-quality, easy-to-operate robots for our soldiers."
So I guess we now know why iRobot launched their legal case against Robotic FX and their Negotiator robot! iRobot must have known a few weeks ago that they weren't going to get the contract and so filed suit. This is a VERY big problem for iRobot, because their chief competitor to date, Foster-Miller, has been getting tons of big contracts of late, more than iRobot. And here, the Negotiator and Robotic FX have totally cleaned up in the 40-45 pound weight class heretofore dominated by the iRobot PackBot family. I have to say I'm totally deflated. There are still lots of reasons to like the stock -- the coming SUGV, Roomba sales, new home robots, but iRobot's bread-and-butter military product just got WHACKED. Given that the Negotiator costs less than the PackBot, iRobot better win that lawsuit! Robotic FX will now attract more capital and talent, etc., and may now have the ability to go public and cause the whole market's margins to shrink into commodity-hood. I may go skulk for the rest of the weekend. Any legal experts out there to brighten my mood?
UPDATE: It's pretty clear that the business plan of Robotic FX is to copy as much of iRobot's business plan as possible without directly violating any laws, and then undercut iRobot on price. The contract appears to be about $93,000 per robot, while iRobot's PackBots have generally been in the $120K-$150K range. (Robotic FX even has a FIDO attachment!) Yuck. Just Yuck.
UPDATE 2: Posters on the Yahoo Message Board have found links showing that Jameel Ahed:
1) Drives a DeLorean.
2) Appears to have the same office address as a dentist also named Ahed, possibly his father.
3) Robotic FX is listed as having 8 employees. That may be an old number, but Jeez!
Tags: iRobot, PackBot
Friday, September 14, 2007
Robotic FX gets $279 MILLION Robot Order, iRobot PackBot Gets ZILCH!!!
Categories:
IRBT News,
iRobot Contracts,
PackBot,
Robotic FX
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11 comments:
Notice the news article says $279 million for 101 robots? That's $2.77 million per robot.
Little pricey isn't it???
So I'm looking forward to someone clarifying what was really awarded. I've looked at the contracts awarded today by the department of defense, and can't find anything. I thought it should show up here:
http://www.defenselink.mil/Contracts/
If you want to look at the bright side, if the military is ordering 1000 this year, that's 899 yet to be awarded.
If IRobot can get a piece of the action for anywhere near $2.77 million a robot, I'll be a very happy shareholder.
In the mean time, I'll be looking for some kind of retraction or clarification of that AP news article.
I doubt the contract was completely funded. No way will those robots cost $2+M.
I wonder if the $279M is for all 3000 robots if delivered - that is $93,000 a robot and I believe Packbot is hovering around $210,000. I had read that Robotic FX was pricing their robots at 1/2 to 1/3 the price of IRobot. That was one of their selling points.
I am still hopeful that IRobot can win the lawsuit. If you look at Robotic FX's robot, it looks so much like the Packbot (OK, it is all black which is the major difference I saw). And of course, if as alleged, it is full of IRobot-like components that are patented, I believe they have a strong case.
By the way, here is a Motley Fool article on the lawsuit (like a previous poster, I ignore most of their articles).
http://www.fool.com/investing/high-growth/2007/08/20/irobot-gets-a-bar-card.aspx
I think it is interesting because Robotic FX's controller is using a Da Vinci-like controller that is patented by Intuitive Surgerical (ISRG). I am really surprised that ISRG hasn't slapped them with a lawsuit because as the article mentions, ISRG makes TONS of cash off their devices that are totally dependent on the Da Vinci controller!
Anyway, let's not be too glum yet but I expect a wild ride for a while!
CharlieSFBayArea
the $279million is probably for the entire 3000 robots, meaning a cost of $93,300 for each one.
This would be a lower price of iRobots packbot which I believe sells for $100,000 each. This is probably the reason why FX got the contract. Remember it is a lowest bid auction. The DOD might have to award FX the contract for forfilling all of the requirements.
If they don't deliver than iRobot might still have a chance, (the lawsuit could possible prevent them from delivery)
Obviously we all need some clarification, lets hope iRobot makes a statement to cool investors.
I agree with thorn, anyway you look at this, it is not good news for us investors. Money will be spent on litigation, we have another competitor, ugly, just ugly...
The wording on that AP news article is very fish. Am I being naive in hoping that they only gave a small percentage of the contract to robotic FX?
Is someone at Robotic FX in bed with someone at the DOD? Was this whole thing rigged from the start? Let the conspiracy theories fly!
fishy, that is...
That's UNBELIEVABLE. I'm just as baffled and upset as you are Thorn. I say the jury is still out on this one.
It's clear this is for 3,000 robots. To a "proven" robot company that nobody heard of before a few months ago.
Wow...words fail at the moment. Except for words like "speechless", "disappointed", "shocked".
It's a toss-up. I've worked for the government before at a civilian engineering house and know that this is the way things go sometimes, but at the same time, to lose the ENTIRE deal is boggling.
Interesteing network solutions lookup. President of the company using hotmail. How the hell do you give this guy huge DOD contract!!
Registrant:
RoboticFX
Jameel Ahed
24 Whites Ave, APT 14
Watertown, MA 02472
US
Email: jameelahed@hotmail.com
Registrar Name....: REGISTER.COM, INC.
Registrar Whois...: whois.register.com
Registrar Homepage: www.register.com
Domain Name: roboticfx.com
Created on..............: Tue, Dec 25, 2001
Expires on..............: Sun, Dec 25, 2011
Record last updated on..: Mon, Feb 27, 2006
Administrative Contact:
RoboticFX
Jameel Ahed
24 Whites Ave, APT 14
Watertown, MA 02472
US
Phone: 617-924-0231
Email: jameelahed@hotmail.com
Take a look at these posts...
http://www.ryanwright.com/dmcnews/2006-02/msg00147.html
"After September 11th I decided to leave my job in Boston and start
my own company.
Mission
Entering into potentially dangerous situations without vital
information places first-responders, as well as those they are
trying to save, at a great risk. Robotic FX, Inc. designs and
manufactures a low cost, highly versatile robotic system available
for immediate use in emergency situations. Our goal is to help first
responders make informed decisions from a safe distance in an effort
to save lives.
I can't wait to catch up with you guys! I need to sit and read all
of these dml messages!
Talk to you guys soon!
Jameel Ahed"
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