iRobot 2009 Annual Report Download - page 48

Download and view the complete annual report

Please find page 48 of the 2009 iRobot annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

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 BCTM
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 cleaning products such as AB Electrolux, ACE ROBOT Co., Agait Technology
Corp. (wholly owned subsidiary of ASUSTek Computer Inc.), Alfred Ka
¨rcher GmbH & Co., Evolution
Robotics, Inc. LG Electronics Inc., Infinuvo/Metapo, Inc, Matsutek Enterprises Co Ltd., Microrobot CO.,
Ltd., Neato Robotics, Inc., Samsung Electronics Co., Ltd., Shenzhen Goldluck Electronic 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
Grumman Corporation;
• established government contractors working on unmanned systems such as Lockheed Martin Corporation,
The Boeing Company, BAE Systems, Inc. and General Dynamics Corporation; and
• developers of small unmanned underwater vehicles such as BlueFin Robotics, a wholly owned subsidiary of
Battelle Memorial Institute, Hydroid a wholly owned subsidiary of Kongsberg Maritime AS; Webb Research —
a wholly owned subsidiary of Teledyne Technologies Company, and Ocean Server Technology Inc.
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
favorably or that we will be successful in the face of increasing competition from new products and enhancements
introduced by existing competitors or new companies entering the markets in which we provide products.
Intellectual Property
We believe that our continued success depends in large part on our proprietary technology, the intellectual
skills of our employees and the ability of our employees to continue to innovate. We rely on a combination of patent,
14