In a turbulent week for the global hardware industry, three well-known but very different companies — iRobot, Luminar, and Rad Power Bikes — filed for bankruptcy, underscoring the mounting pressures facing hardware manufacturers in an increasingly volatile economic and regulatory environment.

Though their products range from robotic vacuum cleaners to autonomous vehicle sensors and electric bicycles, the companies share strikingly similar challenges. Rising tariff costs, failed or blocked acquisition deals, heavy reliance on narrow product categories, and an inability to adapt quickly to shifting market conditions all played significant roles in their collapse.

Rad Power Bikes, once considered a leader in the electric bike space, rose to prominence well before the COVID-19 pandemic. Its strong branding, direct-to-consumer strategy, and focus on quality distinguished it from many lesser-known competitors flooding online marketplaces. During the pandemic, as micromobility surged and commuting habits changed, the company experienced significant growth. Financial filings show revenues exceeding one hundred million dollars in 2023.

However, that momentum proved unsustainable. Revenue declined sharply over the next two years, dropping to roughly sixty-three million dollars during its bankruptcy year. Despite a broad product lineup, Rad Power struggled to secure a lasting foothold beyond its initial success. A costly battery recall further strained finances, arriving at a moment when the company could least afford it.

Luminar followed a different but equally precarious path. Founded in the early 2010s, the company emerged from stealth in 2017 during the height of enthusiasm for autonomous vehicles. Its goal was to make lidar sensors — once bulky, expensive tools reserved for defense and aerospace — affordable and viable for consumer and commercial vehicles. Early partnerships with major automakers such as Volvo and Mercedes-Benz validated its technology. However, Luminar’s heavy dependence on a small number of large deals left it exposed. As the autonomous vehicle hype cooled and contracts failed to expand at the expected pace, the company’s narrow focus became a liability rather than a strength.

iRobot, the most recognizable of the three, became almost synonymous with robotic vacuum cleaners through its Roomba brand. Yet that early dominance proved difficult to defend. Rapid advances in consumer electronics, intensifying competition, and a globalized supply chain heavily dependent on China eroded the company’s position. In a bid to secure its future, iRobot pursued acquisition by Amazon, a deal that was ultimately blocked by regulators. While some critics argue that regulatory intervention hastened the company’s downfall, others point out that iRobot’s desire to be acquired reflected deeper, long-standing structural challenges within the business.

Industry observers note that tariffs have played a quiet but significant role in weakening hardware firms operating on thin margins. Dependence on overseas manufacturing — particularly in China — left companies vulnerable to sudden policy shifts and rising import costs. These pressures reduced their ability to respond to crises such as recalls, slowing demand, or failed partnerships.

Taken together, the bankruptcies of iRobot, Luminar, and Rad Power Bikes reveal more than isolated corporate missteps. They highlight systemic issues facing hardware companies today: capital-intensive operations, exposure to global trade tensions, regulatory uncertainty, and the difficulty of evolving beyond the products that first brought success. As the industry moves forward, these failures serve as a cautionary tale about the limits of innovation without resilience, diversification, and long-term adaptability.

Source: Techcrunch