iRobot Corporation (NASDAQ:IRBT) only just announced it would divest its Defense and Security business last month, and it's wasting no time proving it can make good on its promise to focus on the greater potential of the Home Robot segment.
An exercise in contrast
More specifically, iRobot is working to secure as much market share as possible with its latest indoor robotics technology. That work started with last September's launch of the Internet-connected, visually navigating Roomba 980, and most recently continued with this month's debut of iRobot's new Braava jet 240 Mopping Robot.
But despite their shared interior focus, the Roomba 980 and Braava jet 240 couldn't be more different. On one hand, the Roomba 980 is easily iRobot's most expensive bot, with a suggested retail price of $899. To be fair, it does pack in plenty of intriguing technology to merit that cost, including cloud connectivity, a new motor that adapts on the fly to offer twice the cleaning power on carpeted surfaces, a brush-less, tangle free "AeroForce" cleaning system, and -- perhaps most intriguing -- a camera system using iRobot's V-SLAM technology to create visual reference points and track where it has cleaned in each room. This also allows Roomba 980 to return as needed to its charging base, then resume vacuuming where it left off.
On the other hand, the Braava jet 240 is a relative exercise in simplicity. Priced at just $199, this mopping robot obviously doesn't require the same expensive vacuuming mechanisms as the Roomba line. But it does have its fair share of slick tech, including a vibrating cleaning head to work through tough messes, the ability to navigate in clean lines and avoid damaging furniture with iRobot's latest navigation software, and the ability to detect which type of cleaning pad is attached -- dry, damp, or wet -- then adjust its cleaning pattern and spray nozzle accordingly.
A massive, untapped market
But arguably most important is the market share unlocked by Braava jet 240's affordable price point. And in retrospect, I suppose investors should have seen this coming. During last quarter's conference call, iRobot CEO Colin Angle hinted that a new product would be introduced, but insisted at the time he couldn't provide any specific information on what we now know is the Braava jet 240.
Just moments before that, however, he revealed that growth in China was more than 70% year over year in 2015, driven primarily by the successful adoption of previous Braava models given predominately hard floor surfaces in the region. To be sure, while revenue from iRobot's wet floor care business grew just 5% overall last year, Braava sales climbed more than 30% over the same period. As such, Angle reiterated with Braava's help, iRobot believes China could easily grow to be its second-largest market behind the (currently Roomba-driven) United States.
That's not to say Braava can't succeed stateside as well. Also during last quarter's call, iRobot management highlighted wet floor care as a growth opportunity worldwide as the company improves positioning and "better articulates its value proposition." In addition, iRobot stated part of that effort will involve reaching out to educate and build awareness among existing Roomba customers, which in turn could transform wet floor care into a valuable supplementary revenue stream for iRobot.
In the end, it seems the affordable new Braava jet 240 was tailor-made to accomplish this goal. If that happens, it could mean iRobot is on the cusp of demonstrating some long-awaited diversification away from its core Roomba offerings.