The Information reports that Amazon on Friday announced that it is acquiring iTobit, the manufacturer of the Roomba automated vacuum cleaner, for $1.7 billion.
CNBC writes that "the acquisition marks Amazon’s fourth-largest deal, behind its $13.7 billion purchase of grocery chain Whole Foods in 2017, its $8.45 billion purchase of film studio MGM last year, and its $3.9 billion acquisition of boutique primary-care provider One Medical, announced last month."
The Information story points out that "the robot maker’s automated cleaning products have been a mainstay on Amazon’s online marketplace, and are typically featured prominently during sales periods like Prime Day alongside Amazon’s own smart-home devices. If approved by regulators, the acquisition will further Amazon’s dominance in the connected electronics space … nearly one-in-three U.S. households with internet access had either an Amazon Fire TV device, an Echo smart speaker, or both, according to research published by eMarketer. And Ring, which was acquired by Amazon in 2018, commands the largest slice of the growing video doorbell market."
CNBC notes that in addition to the Roomba, iRobot "has also introduced robotic mops and pool cleaners. iRobot also has a subscription program that offers automatic equipment replenishment, among other services."
From the Washington Post, an assessment of how iRobot's products may fit into Amazon's vision of the world:
"What began as a microphone in a speaker has evolved into a growing genre of devices meant to make domestic life more enjoyable. Last September, at the company’s annual fall press event, Amazon unveiled a 15-inch wall-mounted version of its Echo Show screen that watches and listens to your home, and a number of other products and services that all monitor consumers in some way to anticipate their needs.
"The growth of such technology highlights consumers’ increasing tolerance for sensors and cameras trained on their daily routines. That evolution has drawn criticism from privacy advocates and concerned consumers. It also underscores how tech giants view the home as yet another platform for an array of services and a goldmine of personal data."
Wired casts a skeptical eye on the proposed acquisition:
"Combined with other recent acquisition targets, Amazon could wind up with a comprehensive look at what’s happening inside people’s homes. The ecommerce giant acquired video doorbell company Ring in 2018 and Wi-Fi router-maker Eero a year later. Speakers and other devices with AI assistant Alexa can now control thousands of smart home devices, including Roomba vacuums."
“People tend to think of Amazon as an online seller company, but really Amazon is a surveillance company. That is the core of its business model, and that’s what drives its monopoly power and profit,” Evan Greer, director of the nonprofit digital rights organization Fight for the Future, tells Wired. “Amazon wants to have its hands everywhere, and acquiring a company that’s essentially built on mapping the inside of people’s homes seems like a natural extension of the surveillance reach that Amazon already has.”
Federal regulators and iRobot's shareholders have to approve the deal for it to be completed; the latter is likely, since Amazon's offer is more than 20 percent over iRobot's stock price, and this is the first positive economic news the company has gotten in more than a year.
- KC's View:
It may be a bridge too far if, in addition to owning your doctor's office, Amazon also will be in the business of cleaning it.
On the other hand, while this characterization may contain a bit of hyperbole, it seems right in line with Amazon's approach to the world, which is to find ways to intertwine itself inextricably with every aspect of our lives.
Seems to me that the very things about this deal, taken within the context of everything else Amazon is doing, that might give regulators pause will be the same elements that will appeal to a lot of consumers. The ability to order our vacuum cleaner around via an Alexa-based platform. The ability to access affordable health care via that same platform. And so on.
Here's one sentence from the CNBC story that grabbed my attention:
"iRobot also has a subscription program that offers automatic equipment replenishment, among other services."
It is the use of subscription services by iRobot that may be most appealing to Amazon, because it connects to its own Subscribe & Save business. And it underlines something really important - and, to competitors, concerning - about Amazon's approach - not just starting or acquiring innovative businesses, but then engineering them in a way that takes customers out of the market in the future.