Amazon/iRobot: panic over deal to buy Roomba creator makes little sense 

Collecting data about the state of America’s carpets does not seem the most dangerous manifestation of the surveillance state. But Amazon’s $1.7bn acquisition of iRobot, maker of the Roomba wireless vacuum, has privacy campaigners riled up. If regulators agree, it could undo the company’s post-coronavirus pandemic bargain hunt.

Standing at less than 4 inches tall, Roombas trundle along the ground picking up dirt. Over 40mn have been sold since their introduction two decades ago. Their fallibility endears them to owners. Sometimes they get stuck on rugs. Like Daleks, they cannot go up stairs.

Within Amazon, Roombas will join Echo smart speakers and Ring smart doorbells in the devices and services business. The division’s pride and joy is Astro, a $1,000 robot on wheels that is not yet widely available. Adding a vacuum so it can do chores could make Astro more appealing. iRobot’s tech might also contribute to Amazon’s plans to automate its warehouses.

The company is picking up a bargain. The $61-per-share, all-cash deal, including debt, is a 22 per cent premium over iRobot’s closing price. But it is less than half iRobot’s market value early last year and is close to forecast sales for 2022. Supply chain problems have delayed orders. That contributed to a 30 per cent drop in sales in the second quarter and a net loss of $43mn. Amazon’s logistics infrastructure should improve such hold- ups.

Amazon has purchased over 100 companies since it was created. iRobot is far from the largest. It is less than a tenth the size of the Whole Foods deal. Amazon does not have a monopoly in home tech that the Federal Trade Commission can point to either. Meta and Google also invest in devices.

Roombas collect information as they clean, mapping room shapes and furniture. But the spatial data they provide is less comprehensive than the online purchase information that Amazon already has on 200mn Prime membership shoppers. It is less invasive than medical records too. Earlier this year, Amazon agreed a $3.9bn deal to buy One Medical, a subscription healthcare provider with 767,000 members. Data campaigners should be more worried about healthcare than house cleaners.