Three stories of failure: when hardware meets market limits

Within a few days, the hardware sector witnessed the collapse of three companies with seemingly different trajectories. iRobot with its Roomba, Luminar with lidar technology, and Rad Power Bikes with electric bicycles have all filed for bankruptcy. Yet, beyond their differences, they share a very similar script: globalized tariff pressures, failed strategic deals, and the inability to evolve beyond the product that made them famous.

The weight of dependence on a single category

Rad Power Bikes represents a quintessential case. Within the e-bike market, it was considered an undisputed leader — not for absolute size, but for reputation and build quality. Founded years ago, it caught the wave of the pandemic when micromobility exploded and people completely rethought their transportation. The numbers tell a rather clear downward parabola: in 2023, it earned over $123 million, dropped to about $100 million in 2024, then collapsed to $63 million during the bankruptcy process. The company had a diversified product range but never found a lasting strategy to establish itself stably beyond electric bicycles. The liquidity crisis was accelerated by the recall of batteries — a paradoxical situation where Rad Power feared that recalling defective products would lead to bankruptcy, and that is exactly what happened.

Luminar and the autonomous sensor gamble

Luminar, founded in the early 2000s and emerging from stealth mode in 2017, had an ambitious technological mission: democratize lidar sensors, which at the time were expensive, bulky, and reserved for military and aerospace applications. 2017 marked the peak of hype around autonomous vehicles, and Luminar positioned its sensors as the definitive solution. It secured significant agreements with manufacturers like Volvo and Mercedes Benz. However, excessive focus on this single market segment created structural fragility. When investments in the autonomous sector began to slow and expectations were scaled back, Luminar had no other lines of business to rely on.

iRobot: the problem of commercial dependence

If Rad Power and Luminar represent the failure of companies caught by their own success, iRobot embodies an even more complex dynamic. The company became synonymous with an entire segment — the Roomba is now a generic term in everyday language. But the speed of technological innovation turned its competitive advantage into a trap. The pursuit of a strategic exit through acquisition by Amazon was the clearest indicator of this structural difficulty. When the FTC block halted the deal, iRobot found itself without a safety net.

The real causes: tariffs and globalization

The dominant narrative about iRobot’s failure often blames the blocked Amazon merger, but it ignores deeper macroeconomic factors. As industry experts have observed, building a hardware company in the last 15 years with a fully localized supply chain in the United States would have been nearly impossible. iRobot became structurally dependent on China for manufacturing, creating cascading vulnerabilities. When government administrations imposed tariffs on Chinese imports, the micromobility sector — including companies like Boosted Boards — was hit hard. These tariff pressures did not cause the failure but certainly put these companies at a disadvantage such that any operational issue, even minor, could be potentially fatal.

The regulatory factor beyond simplistic narratives

The issue of the merger block deserves a more nuanced analysis. Yes, the FTC stopped the Amazon acquisition, but this decision was a consequence, not the cause, of iRobot’s structural problems. The company sought the acquisition because it was already fragile, not the other way around. The real lesson is how the hardware sector is subject to simultaneous pressures: aggressive Chinese competition, supply chain complexity, production diversification challenges, and evolving regulatory scenarios.

The point that failures tend to conceal

When three different companies collapse in the same period, the temptation is to look for a single culprit. But reality is more complex: all three cases highlight the inability to adapt beyond the initial product, combined with external pressures (tariffs, failed deals, deflated hype) that made survival impossible. They were not due to insufficient innovation, but rather overly rigid business strategies, coupled with merciless market cycles and a globalization that made the supply chain increasingly fragile. In this context, the role of regulation (such as the merger block) becomes important but secondary to broader macroeconomic and strategic dynamics.