The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, U.S., March 16, 2021. REUTERS/Rebecca Cook
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WASHINGTON, Aug 5 (Reuters) – Most electric-vehicle models would be ineligible for a $7,500 tax credit for U.S. buyers under a Democratic proposal in the U.S. Senate, a group of major automakers said on Friday.
Automakers have been privately expressing concern about the proposal’s increasing requirements for vehicles’ batteries and critical-mineral contents to be sourced from the United States.
John Bozzella, heads of the Alliance for Automotive Innovation that represents General Motors (GM.N), Toyota Motor (7203.T), and Ford Motor among others, said a July 27 proposal by Senators Chuck Schumer and Joe Manchin would make 70% of 72 U.S. electric, plug-in hybrid and fuel-cell EVs ineligible upon passage.
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“None would qualify for the full credit when additional sourcing requirements go into effect,” he said.
Car makers want significant changes to the proposal, which is part of a larger drug pricing, energy and tax bill.
Without the tax credit, the vehicles become more costly for American consumers, and this could impact demand and sales. It could also slow progress toward President Joe Biden’s target to have half of all new vehicles sold be electric or plug-in hybrid models in 2030.
An analysis by the Congressional Budget Office on Wednesday suggested just 11,000 new EVs would use the credit in 2023. read more
Manchin and Schumer’s offices did not immediately comment. The Senate could vote as soon as Saturday on the bill.
“I don’t believe that we should be building a transportation mode on the backs of foreign supply chains,” Manchin said on Tuesday.
The bill includes rising requirements for the percentage of battery components originating from North America based on value. After 2023, it would disallow batteries with any Chinese components.
“A more gradual phase-in of the battery component, critical mineral and final assembly requirements – that better reflect current geopolitical, sourcing and mineral extraction realities – will preserve the credit for millions of Americans,” Bozzella wrote.
Automakers want to expand countries from which batteries, battery components and critical minerals can be sourced to include NATO members, Japan and others.
The new EV tax credits, which would expire at the end of 2032, would be limited to trucks, vans and SUVs with suggested retail prices of no more than $80,000 and to cars priced at no more than $55,000. They would be limited to families with adjusted gross incomes of up to $300,000 annually.
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Reporting by David Shepardson; Editing by Cynthia Osterman
Our Standards: The Thomson Reuters Trust Principles.
California’s Department of Motor Vehicles has accused Tesla of falsely advertising its driver-assistance technology in two complaints that could affect the company’s ability to sell cars in the state.
The agency said Tesla had misled customers by claiming in advertisements that vehicles equipped with its Autopilot and Full Self-Driving Capability programs were autonomous. If the agency’s complaints to the state’s Office of Administrative Hearings succeed, Tesla’s licenses to make and sell vehicles in California could be suspended or revoked.
Tesla “made or disseminated statements that are untrue or misleading, and not based on facts, in advertising vehicles as equipped, or potentially equipped, with advanced driver assistance system (ADAS) features,” the agency said in its complaints, which were filed on July 28.
The Los Angeles Times reported earlier on the agency’s complaints, which are separate from its review of Tesla’s vehicle designs and technological abilities.
Tesla’s chief executive, Elon Musk, and a company lawyer did not immediately respond to a request for comment on Friday evening.
Read More on Electric Vehicles
As the overall auto market stagnates, the popularity of battery-powered cars is soaring worldwide.
In marketing materials on its website, Tesla said its driver-assistance technology was capable of conducting trips “with no action required by the person in the driver’s seat.” Despite Tesla’s disclaimer that the programs “require active driver supervision,” the claim and others were false and misleading, the agency said.
Available since 2015, Autopilot is a system that can steer, brake and accelerate the company’s cars on its own. But it is designed mainly for use on highways, and the company’s documentation requires drivers to keep their hands on the wheel and take control of the car should the system malfunction.
Its name is borrowed from aviation systems that allow planes to fly themselves in ideal conditions with limited pilot input. With the current system, the car will disengage Autopilot if drivers do not consistently keep a hand on the wheel.
For the typical buyer, the added features are minimal. When they are used on city streets, for instance, the car will stop at a red light, but it will not progress after a green light unless the driver intervenes.
In May, Mr. Musk said about 100,000 Full Self-Driving buyers had access to a “beta” test version of the service that could navigate city streets more extensively — while drivers continued to keep their hands on the wheel in case anything went wrong. He also said Full Self-Driving would be “feature complete” by the end of the year and available to about a million car owners.
At the end of 2015, the year Autopilot debuted, Mr. Musk began saying Teslas would drive themselves within two years. In the years since, he has repeatedly claimed that such an ability was just a year or two away.
“There are just so many false dawns with self-driving,” he said in May. “You think you have a handle on the problem and then — nope — it turns out you just hit a ceiling.”
The National Highway Traffic Safety Administration, the country’s leading auto safety regulator, is investigating Autopilot after becoming aware of 35 crashes involving the system, including nine that resulted in 14 deaths. Its investigation covers 830,000 vehicles sold in the United States and will look at Full Self-Driving as well as Autopilot.
Tesla has until next Friday to dispute or otherwise respond to the California Department of Motor Vehicles’ accusations.
The California Department of Motor Vehicles has accused Tesla of engaging in deceptive practices around the marketing of its driver assistance systems, which are branded Autopilot and Full Self Driving in the U.S., according to filing with a state administrative agency.
Elon Musk’s electric car business risks more than its reputation — in a worst-case scenario, the company could temporarily lose the licenses which allow it to operate as a vehicle manufacturer and auto dealer in California.
In a pair of July 28 filings with California’s Office of Administrative Hearings, an official and attorneys for the DMV wrote:
“Instead of simply identifying product or brand names, these ‘Autopilot’ and ‘Full Self-Driving Capability’ labels and descriptions represent that vehicles equipped with the ADAS features will operate as an autonomous vehicle, but vehicles equipped with those ADAS features could not at the time of those advertisements, and cannot now, operate as autonomous vehicles.”
California DMV’s Deputy Director for the Office of Public Affairs, Anita Gore, told CNBC via e-mail that if the department prevails, it “will ask that Tesla will be required to advertise to consumers and better educate Tesla drivers about the capabilities of its ‘Autopilot’ and ‘Full Self-Driving’ features, including cautionary warnings regarding the limitations of the features, and for other actions as appropriate given the violations.”
Gore noted that this action pertains to Tesla’s marketing and advertising practices around Autopilot and FSD only. The California DMV is conducting a separate safety review of “the intended design and technological capabilities of Tesla vehicles,” to determine if they can be used on public roads without a special permit.
The DMV, Gore said, wants to prevent driver misunderstanding and misuse of new vehicle technologies.
The Los Angeles Times previously reported on the DMV’s filings to the administrative body.
Tesla has fifteen days to respond to the accusations before the administrative court, otherwise the DMV will take a default decision.
Tesla includes its Autopilot driver assistance features in all its newly manufactured cars, and sells a premium FSD (or Full Self Driving) option for $12,000 up-front or on a subscription basis for $199 per month. Sometimes, the company sells an Enhanced Autopilot option with a portion of the premium features included.
Elon Musk’s electric vehicle maker also allows drivers to test unfinished driver assistance features on public roads in the U.S. through a program called FSD Beta (or Full Self Driving Beta).
Only Tesla owners who have the company’s premium FSD system installed can participate in FSD Beta. Owners must obtain a high driver-safety score, as determined by Tesla software that monitors their driving, then maintain it to keep using FSD Beta. The company said it has rolled out FSD Beta access to more than 100,000 drivers already, most in the U.S.
Automakers, including Tesla, are now required to report significant collisions involving advanced driver-assist systems to the The National Highway Traffic Safety Administration.
Tesla vehicles comprised around 70%, or more than 270, of reported crashes involving these systems between June 2021 and July 2022, according to federal figures released in early July. The data isn’t meant to indicate which carmaker’s systems might be safest.
NHTSA has also initiated at least 37 special crash investigations into collisions that involved Tesla vehicles where the company’s driver assistance systems were thought to be a factor. At least 17 fatalities resulted from those collisions that inspired NHTSA special crash investigations.
NHTSA has also opened an evaluation of Tesla’s Autopilot technology to confirm whether it is defective and needs to be recalled, after a string of crashes in which Tesla vehicles struck emergency responder vehicles that were standing still.
Read the California DMV’s formal accusations against Tesla here and here.
Amazon devices are listening, watching and will soon be cleaning up after you.
The e-commerce giant will acquire iRobot — best known for its robotic vacuum Roomba — under a $1.7 billion all-cash deal, the latest step in its push into the home. From fitness wearables to streaming devices to its Alexa digital assistant, Amazon has advanced a lineup of devices under an ecosystem that ties consumers more tightly to the company and its services. Last year, it introduced Astro, a $1,000-plus robot meant to ferry around small items and keep its cameras peeled for intruders.
The deal announced Friday also is a continuation of Amazon’s business strategy to expand market share in different product categories through acquisitions. It snapped up Ring, which makes video doorbells and other smart-home technology, in February 2018, and before that Blink, which makes connected cameras and doorbells for the home. It also stunned the grocery industry in 2017 when it announced the purchase of Whole Foods Market, a deal valued at $13.7 billion.
(Amazon founder Jeff Bezos owns The Washington Post.)
The next generation of home robots will be more capable — and perhaps more social
The move comes just two weeks after Amazon announced it would buy the primary care provider One Medical for $3.9 billion as part of a major expansion of the tech company’s health-care ambitions. The tie-up, one of its largest acquisitions ever, gives Amazon a physical network of health-care offices and providers and bolsters its existing health-care portfolio, which includes an online pharmacy and Amazon Care, a virtual and in-home urgent care service.
Amazon’s $61-a-share offer represents a 22 percent premium over Thursday’s closing price of $49.99. On Friday, iRobot stock surged nearly 19.1 percent to close at $59.54.
“We know that saving time matters, and chores take precious time that can be better spent doing something that customers love,” said Dave Limp, senior vice president of Amazon Devices. “Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive.”
Founded in 1990 by roboticists from the Massachusetts Institute of Technology, iRobot offers an array of automated vacuums and mops, as well as air purifiers and handheld vacuums. Its signature Roomba, which retails for as much as $1,000, learns the contours and corners of floors and can detect objects, offering connectivity to WiFi-networks and smartphones and can be summoned by voice-activated smart home devices. The company began trading on the Nasdaq in 2005.
While a top name in home robotics, iRobot has had a rocky year. On Friday, it reported second-quarter revenue of $255.4 million, a 30 percent drop from the year-ago period. It reported a net loss of $43.4 million for the three-month period ended July 2.
The company also plans to shift certain non-core engineering roles to lower-cost regions as part of a cost-reduction plan, and lay off 10 percent of its workforce, roughly 140 employees, according to the earnings report.
The company has withdrawn the 2022 financial forecast that it issued in May and, citing “ongoing disruptions and uncertainty that could impact the company’s outlook,” it suspended providing all other guidance about future performance.
iRobot’s products, which map out the floor plans of its customers’ most intimate spaces, will augment Amazon’s suite of products that function by surveilling the home, and the people inside of it.
What began as a microphone in a speaker has evolved into a growing genre of devices meant to make domestic life more enjoyable. Last September, at the company’s annual fall press event, Amazon unveiled a 15-inch wall-mounted version of its Echo Show screen that watches and listens to your home, and a number of other products and services that all monitor consumers in some way to anticipate their needs.
The growth of such technology highlights consumers’ increasing tolerance for sensors and cameras trained on their daily routines. That evolution has drawn criticism from privacy advocates and concerned consumers. It also underscores how tech giants view the home as yet another platform for an array of services and a goldmine of personal data.
Amazon will acquire iRobot’s net debt under the terms of the deal, which will require approval from regulators and the robot-maker’s shareholders. Colin Angle will stay on as iRobot’s chief executive.
Amazon shares fell 1.2 percent Friday to close at $140.80, giving it a market value of $1.4 trillion.
Last week, the Seattle-based giant reported its second consecutive quarterly loss — of $2.03 billion, or 20 cents per share — driven by a $3.9 billion write-down tied to its investment in electric vehicle start-up Rivian Automotive, the Associated Press reported. But Amazon also recorded a better-than-expected $121.2 billion in revenue during the second quarter.
The Federal Reserve will face more urgency in its fight to cool down the US economy with steep interest rate increases after the latest batch of labour market data showed an unexpected acceleration in jobs gains and strong wage growth.
The figures released on Friday eased concerns that the American economy was sharply slowing down or already in recession after two consecutive quarters of contraction in output this year. However, it will increase worries that high inflation may become entrenched as wages keep rising, requiring even more intervention by the central bank.
The Fed has already moved its main interest rate up from the rock-bottom levels of the coronavirus pandemic to a target range of 2.25 per cent to 2.5 per cent this year, including two consecutive 0.75 percentage point increases in June and July.
On the back of the latest jobs report, economists and Fed watchers say the likelihood of another aggressive upward move next month has risen, although the central bank will still be examining upcoming economic data closely, including inflation figures due next week.
“Today’s numbers should mollify recession fears but amplify concerns that the Fed has a lot more work to do, and we now think a 75 basis point hike in September looks likely. The inflation worries motivating the Fed will only be heightened by this jobs report,” Michael Feroli, a senior economist at JPMorgan, wrote in a note on Friday.
“Jobs haven’t slowed at all in response to Federal Reserve tightening. This is a double-edged sword,” added Michael Gapen, chief US economist at Bank of America, noting that while the chance of a “near-term recession is lower”, the “risk of a hard landing is rising”.
David Mericle, chief US economist at Goldman Sachs, said the report cleared up some “ambiguity” over the strength of wage growth in the US economy, suggesting it was not easing as much as the Fed might hope.
“The overall message is that wage growth is going sideways at a rate that is probably a couple of percentage points stronger than what would be compatible with achieving 2 per cent inflation”, which is the Fed’s long-held inflation target, he said. “The Fed has even further to go than we thought before today.”
Fed chair Jay Powell is expected to lay out his latest thinking on the path of US interest rates and the central bank’s strategy to bring down inflation at the annual Jackson Hole, Wyoming, conference set for late August.
During his last press conference in July, Powell said that “another unusually large increase” in interest rates in September “could be appropriate” but that decision had not been made.
“It’s one that we’ll make based on the data we see. And we’re going to be making decisions meeting by meeting,” he added.
Financial market moves may also be a factor in the Fed’s next step. Traders began pricing in expectations of higher interest rate increases after the jobs data, predicting that rates will peak in March at 3.64 per cent, compared with the 3.46 per cent expected prior to the report. Fed fund futures show the chances of a 0.75 percentage point increase in September have risen to 67 per cent, versus 33 per cent on Thursday.
While the strong jobs number increases pressure on the Fed, it was welcomed by the Biden administration, since it means a sharp economic downturn is less likely ahead of the November midterm elections.
It comes as Congress is preparing to vote on a $700bn package of measures designed to curb inflation by raising taxes on large corporations, reducing the cost of prescription drugs and bringing down the budget deficit — even though it would also boost spending on clean energy incentives in order to fight climate change.
“This bill is a gamechanger for working families and our economy. I look forward to the Senate taking up this legislation and passing it as soon as possible,” Biden said on Friday.
In the answer to Twitter’s complaint, which includes counter-claims against the company, Musk’s team attempts to refute the company’s allegations that the Tesla CEO is unjustly trying to exit the deal. His teamrepeats allegations that Twitter has misstated the number of fake and spam bot accounts on its platform — a central charge Musk has made to justify terminating the acquisition agreementafter originally citing a desire to “defeat the spam bots” as a reason for buying the company.
Musk’s response, which was filed publicly on Friday, states that the billionaire’s team conducted an analysis of fake and spam accounts on the platform using data provided by Twitter’s “firehose” of tweets and a public tool called Botometer created by researchers at the University of Indiana. It did not further detail the process of that evaluation and added that its analysis was “constrained” by a lack of time and information from Twitter.
Based on that analysis, Musk alleges that during the first week of July, spam bots accounted for 33% of visible accounts on the platform and about 10% of Twitter’s monetizable daily active users, or mDAU. (Twitter, for its part, has consistently reported that spam and fake bot accounts make up less than 5% of its mDAU.)
Twitter has repeatedly denied Musk’s claims about the prevalence of spam bots on the platform. Twitter Board Chair Bret Taylor tweeted on Thursday evening a link to the company’s response to his answer and counterclaims. (Musk’s team had filed a confidential version of the answer last week to give Twitter(TWTR) time to review it for company information that should be redacted, before making it publicly available Friday.) Taylor called Musk’s claims “factually inaccurate, legally insufficient, and commercially irrelevant.”
In its response, Twitter takes issue with Musk’s analysis of spam bots, saying that the “firehose” of data he used “reflects many Twitter accounts that are not included in mDAU” and that the Botometer tool he used relies on a different process than the company to determine whether an account may be a bot. It added that Botometer “earlier this year designed Musk himself as highly likely to be a bot.”
The back-and-forth between Twitter and Muskoffers a preview of the arguments each side will make when the case goes to trial, assuming they don’t agree to a settlement first. A five-day trial is set to kick off on October 17, after Twitter had pressed to expedite the proceedings.
Musk last month moved to terminate his agreement to buy Twitter, accusing the company of breaching the deal by making misleading statements about the number of bot accounts on its platform and withholding information that he claims could help him evaluate the issue. Days later, Twitter filed a lawsuit against the billionaire, alleging that he’d violated the agreement and asking a court to compel him to follow through with the deal.
In addition to doubling down on concerns about bot accounts, Musk’s responses also criticized Twitter’s use of monetizable daily active users, a metric Twitter publicly reports to advertisers and shareholders to represent its growth.
Musk claims that his evaluations show only a small portion of the users Twitter considers mDAU actually generate significant revenue for the company by viewing and engaging with advertisements, alleging that the measure is not actually as good an indicator of future revenue growth potential and long-term performance as Twitter’s public filings imply.
“Twitter also does not publish the methodology it follows to determine its mDAU count, or how it excludes nonmonetizable accounts from that metric,” Musk’s answer states. “Thus, it is extremely difficult for any third party to completely recreate Twitter’s mDAU calculations.”
Musk’s answer alleges Twitter leadership has incentives to report “high mDAU numbers to stoke investor interest” and because its executive compensation structure is based partly on mDAU.
In its answer, Musk’s team explains that the billionaire is concerned with the spam bot issue because “transitioning users who do not generate any revenue into more active users … is no easy task.” Musk’s team adds: “A company focused on adding these active users would invest substantial resources towards trying to improve Twitter to maximize engagement, such as by effectively targeting spam or false accounts.”
Twitter said in its response to Musk’s counterclaims that its mDAU count has never purported to show how many users generate significant revenue by interacting with ads, but rather shows the number of real users who could be monetized by being shown ads. It also noted that Musk’s mDAU-related claims were not included in his initial termination filing and “are a newly invented litigating position.”
The company also continues to claim that the issue of bots is not, and has never been, germane to the completion of the acquisition deal. “Musk has received massive amounts of information from Twitter, for months, and has been unable to find a valid excuse to back out of the contract,” Twitter’s response states.
In a letter to Twitter employees that was included in Friday’s regulatory filing, Twitter General Counsel Sean Edgett said that while Twitter had the opportunity to request redactions in Musk’s answer, it chose not to. (Twitter had previously sent a letter to the judge overseeing the case asking her to ensure Musk’s team would not file the public answer early so they would have enough time to review it for potential redactions.)
“We chose not to redact any information–we fully stand behind our SEC filings, the methodologies we use to calculate mDAU, and our statements about the percentage of spam accounts on our platform,” Edgett said in the letter.
The bloat was especially severe on Coinbase’s customer-service team. New staff members often felt that they didn’t have enough to do. “I got maybe four phone calls a day for a while,” said David Visini, a customer-service employee who was laid off. “It was dead, dead, dead.”
Ms. Choi, the chief operating officer, acknowledged that Coinbase had “overhired” during the pandemic and said it was difficult to integrate new recruits in a remote environment.
“I don’t know that we had exactly the right set of tools to set them up for success,” she said.
The crypto market crashed in May, causing Coinbase’s stock price to fall about 60 percent. In the first quarter, Coinbase’s revenue dropped 27 percent from a year earlier, to $1.17 billion, even as its expenses more than doubled, to $1.72 billion.
Its competitors appear to be faring better. Sam Bankman-Fried, chief executive of FTX, said in an email that his financial results had been “ballpark similar” to last year, when the company recorded profits of roughly $350 million. Binance, the largest exchange in the world, declined to reveal revenue figures. But in June, the company’s founder and chief executive, Changpeng Zhao, announced that he was hiring for 2,000 open positions.
That month, Coinbase employees circulated a petition demanding the ouster of several top executives. Mr. Armstrong responded aggressively on Twitter, calling on disgruntled employees to quit. But at a staff meeting, he and other executives struck a more conciliatory note, saying that employees should keep faith in crypto, and that the company would emerge stronger from the tumult, according to two people who attended.
A few days later, the company laid off 1,100 employees.
US government bonds and stocks sold off after employment data showed red-hot labour conditions, leading traders to boost their expectations for Federal Reserve interest rate increases.
Treasury yields shot higher after the closely watched US jobs report showed employers added 528,000 jobs in July, more than double the 250,000 expected by economists and up sharply from 398,000 in June.
The two-year Treasury yield, which is sensitive to monetary policy expectations, surged more than 0.2 percentage points to 3.27 per cent — a sharp jump for a market that typically moves in small increments. Longer-dated bonds came under more subdued pressure.
Meanwhile, the S&P 500 was down 0.4 per cent by the afternoon as traders worried about the prospect of further hawkish rate rises from the Fed. The tech-heavy Nasdaq Composite, the components of which are particularly sensitive to interest rates, was down 0.8 per cent. Both indices had recouped some losses from earlier in the day.
“The narrative is going to be that it’s come in way too hot, the Fed is right, and the markets were wrong,” said Jim Paulsen, chief investment strategist of The Leuthold Group. “I think it’s a muted response . . . on the stock and bond market relative to the emotion generated by the headline numbers.”
The jobs data cap a week in which market participants boosted expectations for tighter monetary policy in the US after remarks from several Fed officials.
San Francisco Fed president Mary Daly said the central bank was “nowhere near” done with its fight to cool inflation, which continues to run at 40-year highs. Chicago Fed president Charles Evans said he thought that a 0.5 percentage point increase at the next policy meeting in September would be appropriate. However, he left the door open to a larger 0.75 percentage point rise, which he said “could also be okay”.
Trading in federal funds futures on Friday showed that markets are expecting the Fed’s main interest rate to peak at 3.64 per cent in March 2023, up from 3.46 per cent before the release of the jobs report. The federal funds rate currently stands at a range of 2.25-2.50 per cent.
The strong jobs data, which also showed the unemployment rate returning to a half-century low, helped allay some concerns that the world’s biggest economy may be headed for a recession. It could also give the Fed impetus to continue with its rapid rate increases, after it pushed borrowing costs higher by 0.75 percentage points in June and July.
“The unexpected acceleration in non-farm payroll growth in July, together with the further decline in the unemployment rate and the renewed pick-up in wage pressure, make a mockery of claims that the economy is on the brink of recession,” said Michael Pearce, economist at Capital Economics, who added that “all the details [of the report] appear to support continued aggressive rate hikes from the Fed”.
However, the job report’s effect on the Treasury market exacerbated the extent to which yields on two-year Treasuries exceed those on the 10-year note. This so-called inversion of the yield curve is typically regarded as an indicator of an impending economic contraction. Following the data, the spread between the yields was at its most inverted since August 2000.
The US dollar followed Treasury yields higher on Friday, with an index tracking the currency against half a dozen peers up 0.8 per cent. The pound and euro each dipped about 0.6 per cent, while the Japanese yen tumbled about 1.7 per cent.
In equities European stocks fell, with the regional Stoxx 600 closing down 0.8 per cent. Asian shares made gains, with Hong Kong’s Hang Seng index up 0.1 per cent.
When I spoke to iRobot’s Colin Angle earlier this summer, he said iRobot OS — the latest software operating system for its robot vacuums and mops — would provide its household bots with a deeper understanding of your home and your habits. This takes on a whole new meaning with the news today that Amazon has bought iRobot for $1.7 billion.
From a smart home perspective, it seems clear Amazon wants iRobot for the maps it generates to give it that deep understanding of our homes. The vacuum company has detailed knowledge of our floor plans and, crucially, how they change. It knows where your kitchen is, which your kids’ rooms are, where your sofa is (and how new it is), and if you recently turned the guest room into a nursery.
This type of data is digital gold to a company whose primary purpose is to sell you more stuff. While I’m interested to see how Amazon can leverage iRobot’s tech to improve its smart home ambitions, many are right to be concerned with the privacy implications. People want home automation to work better, but they don’t want to give up the intimate details of their lives for more convenience.
This is a conundrum throughout the tech world, but in our homes, it’s far more personal. Amazon’s history of sharing data with police departments through its subsidiary Ring, combined with its “always listening (for the wake word)” Echo smart speakers and now its thorough knowledge of your floor plan, give it a pretty complete picture of your daily life.
The Roomba j7 has a front-facing, AI-powered camera that can identify objects in your home.
Each of iRobot’s connected Roomba vacuums and mops trundles around homes multiple times a week, mapping and remapping the spaces. On its latest model, the j7, iRobot added a front-facing, AI-powered camera that, according to Angle, has detected more than 43 million objects in people’s homes. Other models have a low-resolution camera that points at the ceiling for navigation.
All this makes it likely this purchase isn’t about robotics; if that’s what Amazon wanted, it would have bought iRobot years ago. Instead, it probably picked up the company (for a relative bargain — iRobot just reported a 30 percent revenue decline in the face of increasing competition) to get a detailed look inside our homes. Why? Because knowing your floor plan provides context. And in the smart home that Amazon is making a major play for, context is king.
“We really believe in ambient intelligence — an environment where your devices are woven together by AI so they can offer far more than any device could do on its own,” Marja Koopmans, director of Alexa smart home, told me in an interview last month. Ambient intelligence requires multiple data points to work. With detailed maps of our homes and the ability to communicate directly with more smart home devices once Matter arrives, Amazon’s vision of ambient intelligence in the smart home suddenly becomes a lot more attainable.
Astro — Amazon’s “lovable” home bot — was likely an attempt at getting that data. The robot has good mapping capabilities, powered by sensors and cameras that allow it to know everything from where the fridge is to which room you are currently in. Clearly, Amazon already had the capability to do what iRobot does. But for a thousand dollars and with limited capabilities (it couldn’t vacuum your home) and no general release date, Astro isn’t getting that info for Amazon anytime soon.
Amazon’s Astro robot is capable of mapping your home.
Ring’s Always Home Cam has similar mapping capabilities, allowing the flying camera to safely navigate your home. That product has further reach than Astro, as it only costs $250 and has a very clear security focus. But it’s still not available to buy.
So, what iRobot brings to Amazon is context at scale. As Angle told me in May, “The barrier to the next level of AI in robotics isn’t better AI. It’s context,” says Angle. “We’ve been able to understand the utterance ‘go to the kitchen and get me a beer’ for a decade. But if I don’t know where the kitchen is, and I don’t know where the refrigerator is, and I don’t know what a beer looks like, it really doesn’t matter that I understand your words.” iRobot OS provides some of that context and, as it’s cloud-based, can easily share the information with other devices. (Currently, users can opt out of Roomba’s Smart Maps feature, which stores mapping data and shares it between iRobot devices.)
A view of a Roomba j7’s map and AI-powered camera capabilities.
With context, the smart home becomes smarter; devices can work better and work together without the homeowner having to program them or prompt them to do so. Angle used the example of a connected air purifier (iRobot, so now Amazon, owns Aeris air purifiers). The air purifier could automatically know which room it was in using the iRobot OS cloud. “It would [know] ‘I’m in the kitchen. It’s okay to make more noise. And there are a lot of sources of pollutants here.’ Compared to its role in a bedroom, which would be different,” says Angle.
Amazon now owns four smart home brands (in addition to its Alexa platform, anchored by its Echo smart speakers and smart displays): home security company Ring, budget camera company Blink, and mesh Wi-Fi pioneers Eero. Add in iRobot and Amazon has many of the elements needed to create an almost sentient smart home, one that can anticipate what you want it to do and do it without you asking. This is something Amazon has already started to do with its Hunches feature.
But consumer trust is a major roadblock. Amazon will need to do a lot more to prove it’s worthy of this type of unfettered access to your home. Today, for many people, more convenience just doesn’t feel worth the tradeoff.
Photography by Jennifer Pattison Tuohy / The Verge
Aug 5 (Reuters) – Amazon.com Inc (AMZN.O) will acquire iRobot Corp (IRBT.O), maker of robotic vacuum cleaner Roomba, in an all-cash deal for about $1.7 billion, in the latest push by the world’s largest online retailer to expand its stable of smart home devices.
Amazon will pay $61 per share, valuing iRobot at a premium of 22% to the stock’s last closing price of $49.99.
iRobot’s shares rose 19% in early Friday trading to $59.56. At its peak during pandemic lockdowns, iRobot was trading at more than twice that price as hygiene-conscious consumers invested in premium vacuum cleaners.
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Amazon already owns virtual assistant Alexa, Ring, which monitors homes, and a smart thermostat, giving it a range of products in the “internet of things” category, said Ethan Glass, an antitrust expert with law firm Cooley LLP.
He said the U.S. Federal Trade Commission, which is already investigating Amazon, would likely review the transaction.
“I would say there is a three out of four chance of a deep investigation and a one out of four chance of a challenge,” he said. “The political appointees have made clear that they would rather go to court and lose than let a deal through that later is criticized as anti-competitive, especially as they seek to change the laws.”
Charlotte Slaiman of Public Knowledge added that antitrust enforcers now saw the risk of under-enforcement as an issue rather than just over-enforcement. “The costs of inaction are much higher than antitrust experts used to think,” she said.
Besides sweeping up dirt, Roomba vacuums that cost as much as $1,000 collect spatial data on households that could prove valuable to companies developing smart home technology.
But iRobot’s fortunes took a hit as consumers started rethinking how they spend their money amid rising inflation. Its second-quarter revenue fell 30% on weak demand from retailers in North America and Europe, Middle East and Africa.
The deal comes at a time analysts expect cash-rich technology companies to go on an M&A spree to take advantage of low valuations due to growth pressures. Amazon currently has cash and cash-equivalents of more than $37 billion.
Devices make up a fraction of overall sales at Amazon, but include smart thermostats, security devices and it has recently launched a canine-like robot called Astro.
“It seems like (CEO) Andy Jassy is going to employ M&A more than (predecessor) Jeff Bezos and it makes more sense to me now that Amazon is bigger and has more cash,” said D.A. Davidson analyst Thomas Forte.
If the deal falls through, Amazon would be required to pay iRobot a $94 million termination fee. On completion of the deal, Colin Angle would remain as the chief executive of iRobot.
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Reporting by Akash Sriram and Nivedita Balu in Bengaluru Additional reporting by Diane Bartz in Washington
Editing by Arun Koyyur and Mark Potter
Our Standards: The Thomson Reuters Trust Principles.
