iRobot 2007 Annual Report Download - page 49

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Spiral Development
One of the methods we use to develop military products is a “spiral development” process to get field tested
equipment to the troops more quickly. After we develop a new product or product upgrade that will fulfill the
desired requirements of the user, the product is tested with soldiers in the field. The user provides performance
feedback on the product to the in-field engineer. Revisions are made quickly to retest in the field. This method has
allowed our research and development team to not only make revisions on existing products quickly and efficiently,
but also capture feedback for future upgrades and innovations to meet user needs. Periodically we send engineers in
the field with our PackBot tactical military robots to solicit feedback from users which is often times incorporated
into future product development and product enhancements. We intend to solicit similar user feedback in the field
for the prototype intelligent vehicles.
Leveraged Model
Our research and development efforts for our next-generation products are supported by a variety of sources.
Our next-generation military products are predominately supported by U.S. governmental research organizations
such as the Defense Advanced Research Projects Agency, or DARPA, U.S. Space and Warfare Command, or
SPAWAR, Technical Support Working Group, or TSWG, U.S. Army Tank-Automotive and Armaments Command,
or TACOM, U.S. Army Armament Research, Development and Engineering Center, or ARDEC, and the
U.S. Army’s FCS program. While the U.S. government retains certain rights in the research projects that it has
funded, we retain ownership of patents and know-how and are generally free to develop other commercial products,
including consumer and industrial products, utilizing the technologies developed during these projects. Similarly,
expertise developed while designing consumer products is used in designing products for government and industrial
applications. We also work with strategic collaborators to develop industry-specific technologies. Moreover, we
continue to reinvest in advanced research and development projects to maintain our technical capability and to
enhance our product offerings.
Competition
The market for robots is highly competitive, rapidly evolving and subject to changing technologies, shifting
customer needs and expectations and the likely increased introduction of new products. We believe that a number of
established companies have developed or are developing robots that will compete directly with our product
offerings, and many of our competitors have significantly more financial and other resources than we possess. Our
current principal competitors include:
• developers of robot floor care products such as AB Electrolux, Alfred Ka
¨rcher GmbH & Co., Samsung
Electronics Co., Ltd., LG Electronics Inc., Infinuvo/Metapo, Inc, Matsutek Enterprises Co Ltd., Microrobot
CO., Ltd., ACE ROBOT Co., Ltd. and Yujin Robotic Co. Ltd.
• developers of small unmanned ground vehicles such as Foster-Miller, Inc. — a wholly owned subsidiary of
QinetiQ North America, Inc., Allen-Vanguard Corporation, and Remotec — a division of Northrop Grum-
man Corporation; and
• established government contractors working on unmanned systems such as Lockheed Martin Corporation,
BAE Systems, Inc. and General Dynamics Corporation.
While we believe many of our customers purchase our Roomba floor vacuuming robots and Scooba floor
washing robots as a supplement to, rather than a replacement for, their traditional vacuum cleaners and wet floor
cleaning methods, we do compete in some cases with providers of traditional cleaning products.
We believe that the principal competitive factors in the market for robots include product features, perfor-
mance for the intended mission, cost of purchase, total cost of system operation, including maintenance and
support, ease of use, integration with existing equipment, quality, reliability, customer support, brand and
reputation.
Our ability to remain competitive will depend to a great extent upon our ongoing performance in the areas of
product development and customer support. We cannot assure you that our products will continue to compete
15
Form 10-K