This op-ed was originally published by RealClearMarkets.
Earlier this month, Amazon announced their $1.7 billion deal to buy iRobot, and in spite of the critical reviews they’ve received since, this could be a good thing for American consumers.
Opponents of this transaction claimed the acquisition would help Amazon assert monopoly control over the smart home market, while others called the deal an overt attempt to gain access to user data collected by iRobot. But the deal also stands to lower prices, improve product quality, and inject funds into the company that pioneered robot vacuums at a critical point in its life-span. If the deal goes like so many Amazon acquisitions before it, it would be a major benefit to consumers.
Amazon has a long track record of acquisitions that ended up improving accessibility — in terms of price and consumer experience.
Consider Amazon’s acquisition of Ring in 2018, for example. Ring doorbell cameras are used by millions as a means of affordable home security. Ring doorbell cameras have also recorded crime and captured major meteorological events. At the time Amazon purchased Ring, the price for the 2018 model hovered around $200. Now, four years and three iterations later, the sticker price for the newer 2020 model is under $100 — meaning the higher quality version is more affordable to consumers than it was before the acquisition.
Internal projects — like Amazon’s Kindle e-reader — demonstrate Amazon’s focus on price and quality even more clearly. When Amazon first launched the Kindle e-reader in 2007, the price hovered around $399. Today, after several upgrades and redesigns, Kindle is far more powerful and priced at around $49. Other versions of the reader, like the Fire Tablet, are among the most affordable, especially on Prime Day.
The list of Amazon’s affordable products and improvements goes on, including smart home devices like Alexa-enabled Echo. When it comes to robot vacuums, the market is ripe for the same kind of positive change.
iRobot has pioneered robot vacuum technology. When the first Roomba was sold in 2002, iRobot’s vacuums and mops spurred a new market for home convenience. Competing models from vacuum manufacturers like Dyson and Shark ensued in the following decades.
But the present state of the robot vacuum market is rocky. Due to global supply chain issues caused by the pandemic, iRobot struggled to turn a profit last year, and Amazon is assuming a sizable chunk of corporate debt with the acquisition. Roombas and competing products can be prohibitively expensive and vulnerable to wear-and-tear, making them less attractive to consumers. The time-value of buying a Roomba, versus spending 20-minutes to vacuum the floor by hand, simply doesn’t add up for many consumers.
If Amazon is able to lower the price of a Roomba, as it did with Ring Doorbells, more consumers will be able to afford them. If Amazon improves the quality of newer models, like it did with Kindle e-readers, robot vacuums may also see steep improvements. Amazon’s acquisition would be welcome news to anyone hoping to save a little time on chores.
Yet, as critics of this deal correctly point out, consumers should make informed decisions before allowing convenience to override personal preference in privacy. And in light of Amazon’s recent acquisitions — like One Medical, PillPack, and MGM — scrutiny of the monopoly concerns raised by this deal are also warranted to an extent.
Ultimately, it all comes down to consumer choice. Educating consumers about how to protect their data, outlining forward-looking industry standards, and listening to the continued drumbeat of industry skeptics is more likely to benefit consumers than calling the deal off altogether.
In the grand scheme of things, the purchase of a robot vacuum company is hardly the stuff of nightmares.
