A disabled robot
IRBT is back to $18. This seems to be the natural support level for this stock - the level to which it reverts in the absence of any catalysts.
Not that the support is necessarily "natural". 6 years ago IRBT would have traded at $180 based on the same fundamentals.
But it is perfectly explainable. For $18 is just the right price for the maker of Roombas and Scoobas, assuming it fails to find new niches for itself. Which is what the market is currently assuming. And the market may be just right.
One brief look at IRBT's product line - Roombas, Scoobas, DirtDogs, and PackBots of al varieties - reveals the strengths and weaknesses of the company. IRBT can do a terrific job producing sensors and programming robot's behavior, and it has no equals in writing algorithms for behavioral robotics. But this company hasn't yet figured out how to make even simple moving mechanical parts. As of now, by fully utilizing the services of Chinese companies, it can make wheels, and (when helped by John Deer) tracks. There was no attempt or even suggestion to expand robots' capabilities beyond simple rotational motion of wheels.
A robotic arm with fingers is an absolute necessity if IRBT hopes to ever move beyond mopping and vacuuming. A robot that cannot grip objects will always be consigned to secondary roles. And even the move to give Aware 2.0 to developers will be quite useless, because without an arm, there can be no new meaningful applications for freesbees on wheels. It is not necessary to have all 5 fingers. Just 3 fingers will be fine. OK, let it be 2 fingers - for starters. But anything less is just insufficient. Either IRBT will provide it, making the Aware system a new industry standard, or someone else will do it instead of them.
When/if IRBT releases a new Roomba with a hand whose two fingers do nothing at all, but are physically capable of performing some useful function if programmed via the Aware API, then I will gladly pay $180 for a share of IRBT. But for now, at $18, and with no advertisements for mechanical engineers on IRBT's site, it seems to be fully valued.