When Giants of Hardware Face Headwinds: Three Companies' Struggles Reveal Industry Rot

The past week witnessed a striking convergence of bankruptcies in the hardware sector — iRobot, Luminar, and Rad Power Bikes all filed for insolvency within days of each other. While these companies operate in vastly different niches — home robotics, autonomous vehicle sensors, and electric micromobility — their collapses share a troubling pattern of systemic vulnerabilities that plague modern hardware ventures.

The Common Threads Behind Separate Failures

At first glance, these three companies seem to occupy entirely different corners of the market. Yet their downfalls reveal striking parallels: each became so deeply entrenched in solving one specific problem that they couldn’t adapt to changing market conditions. Beyond that fundamental weakness, they all grappled with external pressures including tariff burdens, regulatory obstacles, and failed acquisition attempts that would have provided lifelines.

Rad Power Bikes: The Pandemic Winner That Couldn’t Sustain Momentum

Rad Power emerged as a genuine leader in the e-bikes space during its heyday. Launched well before the pandemic, it had built credibility through solid engineering and authentic customer engagement — a rarity in an e-bike market otherwise dominated by faceless Amazon sellers churning out alphabet-soup brand names. When pandemic-era remote work triggered the micromobility boom, Rad Power rode that wave successfully.

The numbers tell a story of rapid ascent followed by sharper decline. In 2023, the company generated over $123 million in revenue. By last year, this had compressed to approximately $100 million. The downward trajectory accelerated further through the bankruptcy year, with revenues plummeting to just $63 million. Despite a diversified product lineup, Rad Power never managed to expand its identity beyond its core market segment.

A brutal final blow came in the form of battery safety recalls. The company faced an impossible choice: execute the recalls and trigger bankruptcy, or skip them and face far worse consequences. They ultimately filed anyway, suggesting the financial deterioration had already become terminal by that point.

Luminar: How Concentration Risk Killed a Sensor Pioneer

lidar companies typically faced an uphill battle establishing commercial traction, but Luminar seemed positioned to change that narrative. Founded in the early 2010s and emerging from stealth in 2017, the company landed at precisely the moment when autonomous vehicles generated maximum industry excitement. Luminar’s core pitch — making lidar sensors affordable and compact enough for mass-market automotive applications — appeared prescient.

The company secured high-profile partnerships: most notably with Volvo, supplemented by deals with Mercedes-Benz and other legacy automakers. Yet Luminar’s trajectory proved too dependent on these relationships. The concentration in a handful of partners, combined with the autonomous vehicle hype cycle cooling far more slowly than expected, eventually suffocated growth prospects. When growth stalled, the company had no alternative revenue streams to sustain operations.

iRobot: When Brand Dominance Becomes a Straightjacket

iRobot’s situation presents perhaps the most haunting cautionary tale. The company achieved something rare: it became a category itself. “Roomba” entered the vernacular as shorthand for robot vacuums. This brand power, however, proved to be a double-edged sword.

As autonomous vehicle technology, AI, and hardware capabilities evolved at accelerating pace, iRobot discovered it couldn’t reinvent fast enough while defending its installed base. The company began pursuing an acquisition as a strategic option — specifically, a deal with Amazon that would have provided access to deeper pockets, distribution channels, and technological synergy. The FTC blocked this transaction, citing competitive concerns.

Whether the regulatory intervention was justified becomes almost moot given what followed. The blockage removed the exit ramp precisely when the company needed financial firepower to navigate transition. Without Amazon’s resources and ecosystem integration, iRobot’s competitive moat proved insufficient to overcome mounting pressure from both legacy appliance makers and newer entrants.

The Tariff and Supply Chain Dimension

A through-line connecting all three companies involves the brutal reality of modern manufacturing economics. iRobot’s case most starkly illustrates this: the company built its success atop a China-dependent supply chain that would have been economically impossible to replicate within the United States over the past 15 years.

This reliance on overseas manufacturing created vulnerability in an environment of tariff uncertainty. When trade policies shifted, companies like Boosted Boards in the micromobility space discovered they lacked the financial resilience to absorb cost shocks. Rad Power and others faced similar headwinds, finding themselves caught between rising input costs and inability to raise prices without destroying demand.

The tariff question haunts regulatory debates: did FTC blocking of Amazon’s acquisition of iRobot inadvertently accelerate decline that acquisition would have prevented? Some argue yes — that regulatory protection sometimes produces pyrrhic victories. Others counter that structural problems existed regardless, and that the narrative of “FTC killed the company” oversimplifies more complex failures in vision and execution.

The Deeper Lesson

These three bankruptcies illustrate a pattern in hardware businesses: dominance in a narrow category without diversification, exposure to global supply chain risk, and vulnerability to regulatory interventions can prove fatal when combined. Companies that achieve category definition may actually face the greatest danger, as they become trapped defending what made them successful rather than evolving toward what comes next.