iRobot Corporation's Telepresence Revolution Takes Another Step

iRobot just announced its Ava 500 robot is ready for delivery. Here's what robotics enthusiasts and investors need to know.

Mar 17, 2014 at 4:45PM

iRobot, Cisco collaborate to bring businesses the Ava 500

iRobot's Ava 500 is ready for delivery. Source: iRobot.

Early Monday, shares of iRobot Corporation (NASDAQ:IRBT) rose by more than 9% after the robotics specialist announced the next step in its efforts to revamp video teleconferencing as we know it.

Specifically, iRobot's new Ava 500 video collaboration robot is finally ready for delivery in the U.S., Canada, and select European markets through select Cisco Systems (NASDAQ:CSCO) resellers. The announcement comes more than nine months after iRobot first announced its partnership with Cisco, and it follows a successful beta program at various sites, including Fortune 500 companies.

One of those sites includes German pharmaceutical giant Bayer, whose head of commercial business development, Dr. Michael Graefenstedt, hailed the Ava 500's cost savings and productivity advantages as holding "great promise for how business will be conducted on a global scale moving forward." 

To be sure, Ava not only allows people to take part in remote meetings, but also provides complete freedom of movement in areas like hallways and manufacturing floors.

Don't get too excited just yet
However, keep in mind this may not move iRobot's revenue needle anytime in the near future. Of iRobot's $126.3 million in sales last quarter, only $1 million came from its comparable health care-centric RP-VITA telepresence robots, which were originally unveiled with partner InTouch Health in July, 2012. RP-VITA was also the first system derived from iRobot's broader Ava platform, and it finally showed its first signs of gaining traction with hospitals last May.

In short, like the RP-VITA for hospitals, the Ava 500 definitely holds promise in changing the landscape for how business is done. Still, I think its influence is likely to be minor in the near term.

But that also doesn't guarantee Ava 500 won't take off more quickly. Shortly after RP-VITA was introduced, iRobot CEO Colin Angle hinted at his company's aspirations for Ava outside of the medical arena by saying, "If we can survive and be cleared to operate in that most challenging environment, that will open the door to many other environments." With those doors open, Ava may have an easier time gaining acceptance elsewhere.

In fact, a quick glance at iRobot's website shows they've developed no less than seven additional concepts for the platform, with other notable applications including security, caregiver support, factory inspection, material transplant, mobile kiosks, and remote retail product expert chat.

iRobot, Cisco collaborate on Ava 500

iRobot's Ava remote telepresence concepts. Source: iRobot.

This also explains why Rowan Trollope, senior VP and GM of Cisco's Collaboration Technology Group, curiously described the Ava 500 as an "important milestone" for iRobot. Trollope elaborated:

For truly amazing things to happen, video needs to be available everywhere -- on every pane of glass, in every meeting space, and in all the spaces in between. The combination of Cisco TelePresence, Cisco wireless networking and iRobot autonomous mobility will help customers collaborate in new ways. This solution demonstrates a level of innovation that we believe is going to be critical to the next wave of growth in the collaboration industry.

However insignificant Ava's revenue is in the near term, that "next wave" is exactly why iRobot investors are so excited today. As a longtime iRobot investor myself, I can't wait to see what else the company has planned.

There's more where this came from
But wherever iRobot is headed next, it's going to take time to get there. It's no secret that investors tend to be impatient with the market, but the best investment strategy is to buy shares in solid businesses and keep them for the long term.

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Steve Symington owns shares of iRobot. The Motley Fool recommends Cisco Systems and iRobot. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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