IRBT – ConnectR Delays Highlight Growing Pains At iRobot

iRobot initiated sign-up for ConnectR Pilot Program immediately after the September 2007 press release at DigitalLife. The product is pricey at $199 even through the pilot program, and only time will tell how keen consumers will be to actually purchase it. The starting price when the product is released is expected to be $500, a price point that will make it hard for iRobot to penetrate the home market.

The press release had indicated that ConnectR would be made available to customers in the pilot program towards EOY 2007. By December, iRobot announced that they are delaying the program to early 2008 largely due to the overwhelming response from prospective customers. Last week, they sent an email thanking those who had signed up for their support. Below is an excerpt from that email:

Your response to our upcoming ConnectR Pilot Program has been overwhelming and we couldn’t be more excited. All of us on the ConnectR team are hard at work with the goal of putting ConnectR Virtual Visiting Robots in the first consumers’ homes as soon as we can in 2008. We will be selecting people over the next few months and will let you know as soon as possible whether you have been chosen to participate. So again, thank you for your interest and support.

From the above statements, it is only logical to conclude that iRobot was premature in announcing the product in September 2007 and this report indicates a scramble to get the product out. As indicated in our previous article on iRobot, on time delivery is a business skill that management needs to cultivate. Here is another excerpt from the same email:

Eventually in our homes, we will have teams of single-purpose robots working together to accomplish a variety of jobs. For example, a Roomba could be vacuuming your living and dining rooms, a window washing robot could be hard at work in the family room, and a dog-walking robot could be out walking Fido. And ConnectR could be working with you to call the shots. "I think there will be one robot that talks to humans and directs the little bots," says Angle. ConnectR could conceivably evolve into this robot-in-chief role since it is specifically designed to interact with humans.

The statements further validate the concern that the company has struggled to define the value proposition for the ConnectR product. For an investor, this spells a situation where the product is much ahead of itself, as the company is still not done defining the product.

Investing in the right areas to realize growth is another sore spot for iRobot. Though Roomba is a great product that could potentially complement or replace home vacuums, penetration has been low. Concentrating on a variety of low volume products instead of focusing on making the Roomba their flagship product is a mistake management is making as we speak.

To summarize, investors will have to take it slow, while management learns to set expectations that are achievable and grow profits in its home robots business. However, the defense side of their business should provide some stability and consistent growth.

01/2009 Update:

iRobot notified ConnectR pilot program sign-up participants this month that they have decided to cancel the program. Below is an excerpt from the email to the participants:

Why didn't ConnectR make it through the pilot test?

While ConnectR users enjoyed having the robot and experienced the many advantages of virtual visiting, it was found that the robot was not yet practical enough to meet their expectations. One of our main goals at iRobot is to provide our customers with practical, easy-to-use robots.

Is the ConnectR program discontinued?

No. While the ConnectR that we have come to know will not be sold commercially, iRobot will continue its work on developing practical virtual visiting robots for your home.

When will a new virtual visiting robot be released?

iRobot has no timetable as to when a virtual visiting robot will be available for purchase. We are currently looking at the ConnectR pilot program and are working to address the issues found there. iRobot will not put a virtual visiting robot up for sale until it is practical, easy to use and includes the necessary features that customers want.

As we noted in our original post, iRobot is struggling to define the product. Specifically, they are having a hard-time showing its use in the real world. While ConnectR was portrayed as the eventual robot-in-chief in thier previous notification early last year, that idea was conspicuously missing from the latest update. That might indicate a complete change of direction in the focus of this product group.

To our mind, iRobot is making a big mistake by not focusing on the Roomba and helping it be a household name. Market penetration and awareness are still very low inspite of it being a useful product with a price range that fits most family budgets - in our two years of ownership we have come to hear from our guests the following misconceptions about Roomba repeatedly:
  1. The product is priced out of their range - as in 1000s. In reality, Roomba is priced between $100 and $700 depending on the model in features.
  2. It doesn't really work very well. In reality, we have used the Roomba exclusively as our home vacuum cleaner for the last two years.
A heavy-weight marketing partnership could alleviate the situation but management has so far been very hesitant...

Related Posts:

1. Roomba 600 & 500 Series Comparison/Review (5-series: 530, 532, 535/540, 550, 555, 560, 562, 570, 580, 6-series: 610) - 12/07.
2. iRobot (IRBT) Analysis – 01/08.
3. ConnectR delays highlight growing pains at iRobot (IRBT) – 2/08.
4. Infinuvo CleanMate QQ-1, QQ-2 – An Alternative To The iRobot Roomba Robotic Vacuums – Comparison and Review! - 09/08.
5. iRobot Roomba 5-series Robotic Vacuum Part/Accessory Replacement (Side Brushes) – Customer Support/Warranty Coverage Experience - 09/08
6. Best Value Robotic Vacuums - A Comparative Review - 03/09.

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