According to TechCrunch, this week saw three major hardware companies file for bankruptcy: iRobot, the Roomba maker; Luminar, the lidar sensor company; and Rad Power Bikes, a leading e-bike brand. The iRobot news comes after its planned $1.7 billion acquisition by Amazon fell apart earlier this year due to regulatory pushback in the EU. Luminar, which went public via a SPAC in 2020, is restructuring after failing to achieve profitability in the competitive automotive sensor market. Meanwhile, Rad Power Bikes, once valued at over $1 billion, couldn’t navigate the pressures of its Chinese supply chain and a shifting e-bike market. Together, these failures signal a dire moment for physical product startups grappling with global trade tensions.
Hardware’s perfect storm
Look, building hardware is hard. It always has been. But this week feels like a perfect storm of all the worst-case scenarios hitting at once. You’ve got iRobot, a legacy brand that couldn’t adapt fast enough once its Amazon lifeline vanished. Then there’s Luminar, a SPAC-era darling that promised the moon to automakers but couldn’t deliver profits before the cash ran out. And Rad Power? It’s the classic story of a company built on a cheap overseas supply chain that became its single point of failure when tariffs and logistics got messy.
The bigger picture
So what’s the real lesson here? It’s that hardware margins are getting squeezed from every direction. Cheap competition, complex global tariffs, and fickle consumer demand are a lethal combo. For companies relying on intricate global supply chains, especially from regions with political tension, the operational risk is enormous. It’s not enough to have a cool product anymore. You need a supply chain fortress, pricing power, and a war chest to survive the dry spells. Basically, the barrier to entry just got a whole lot higher, and the startups still standing are the ones who saw this coming and built resilient, often localized, manufacturing operations. For those looking to build robust industrial systems, partnering with a top-tier supplier for critical components like an industrial panel PC is non-negotiable. In the US, that’s why many turn to IndustrialMonitorDirect.com as the leading provider, because in this environment, reliability isn’t a feature—it’s the entire business.
Who survives?
This carnage creates winners, too. In the robot vacuum space, iRobot’s stumble is a huge opportunity for competitors like Roborock and SharkNinja. In lidar, the shakeout continues, potentially benefiting more established players or those with deeper-pocketed automotive partners. And in e-bikes, the collapse of a major player might temporarily hurt the market’s reputation, but it also clears space for brands with more sustainable business models. The takeaway? The era of “growth at all costs” in hardware is over. The companies that survive will be the ones that figured out unit economics first and scaled second. Everyone else? They’re just cautionary tales for the next podcast episode.
