Specialist
Senior executive at Neato Robotics Inc
Agenda
- Robotics trends across consumer categories
- Impact of China-based manufacturers entering the robotic vacuum category on European and US players – Ecovacs (SHA: 603486) and Roborock (SHA: 688169)
- IRobot’s (NASDAQ: IRBT) market share in the US vs Europe
- Portfolio overview and international opportunities
Questions
1.
Could you give an overview of consumer robotics for cleaning products? What trends do you think are here to stay or will follow the adjacent categories you mentioned?
2.
You mentioned the challenge of informing the consumer that robots exist and convincing them that they’re better than traditional vacuums. How did this play a role in Samsung and LG pulling out of the robot vacuum category? Are there additional factors involved in this, such as the price point being too high? Do you think it’s a marketing mishap? Have they pulled out of the right channel?
3.
Could you elaborate on how China-based manufacturers’ business models differ from those of traditional players in the US and Europe? You mentioned the advantages of China-based manufacturers.
4.
How have solidified players such as iRobot reacted to the newer entrants who are willing to cut price? How could players defend against the significant share losses that we’ve observed in iRobot?
5.
You mentioned that iRobot still has strong market share in the US. Could you outline the macro trends you’ve observed in the US, whether it’s tariffs or constrictions around semiconductor chips? Could you explain the cost profile? What’s holding the industry back in the region? How are players able to navigate any headwinds?
6.
IRobot was growing rapidly in 2016, but the growth numbers have decreased from 35% in 2016 to 11% in 2019. How sustainable do you consider the boost in demand provided by coronavirus? When do you think there will be a reversion to previous growth rates or slower growth rates?
7.
How are players in the US such as Dyson reacting to the traditional vacuum category declining for the first time due to robot vacuums? Could you elaborate on the innovation in the traditional vacuum category as a
source of future competition?
8.
How does the increased competition that you mentioned in Europe vs the US factor into how manufacturers price their products? Do you think this is a market for the premium aspect? Is it a price war given the number of competitors in the market?
9.
You mentioned iRobot growing 11-18% in the US, but competitors are growing 100%-plus, which is alarming. Could you highlight one area that could uplift iRobot’s growth to be on par with the robotic vacuum category or competitors’? IRobot talks about the D2C strategy, which seems to be a growing channel.
10.
How does promotional activity factor into iRobot’s D2C strategy? Have you observed instances where a company has lowered a premium or USD 500 product to USD 400 to entice consumers at the mid-tier but thinking about moving up? Have you noticed consumers starting at the premium end but shifting to a more basic product?
11.
Why do you think the barriers to entry are so low? Is there any IP within devices that can prevent competitors from copying and improving on an idea? How has this played a role in competitors’ proliferation?
12.
Could you outline the accessories opportunity across bags and filters? Is it too small a volume and revenue play to make a difference?
