iRobot (IRBT) has long been a dominant force in consumer robotics. The company's Roomba product is particularly well-known in the robotic vacuum cleaner space. Unsurprisingly, iRobot's success has attracted far more competition to the consumer robotics market. As a result, it has become increasingly hard for iRobot to maintain its hardware advantage.

Despite the influx of competition, iRobot has still managed to produce some of the highest quality products. iRobot is the leading player in consumer robotics with a revenue of ~$280 million in Q2. However, iRobot could see its hardware edge erode over time, especially as larger companies jump into the space. As such, iRobot's decision to focus more heavily on software is incredibly smart.

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