Netgear loves to brag about how popular its Arlo line of smart security cameras is, and apparently it’s been doing well enough that the company plans to break the unit off into a standalone business. In the second half of this year, Netgear intends to separate Arlo and make the unit public through an IPO, giving up control of the new company. Matthew McRae, a Netgear exec who was previously the chief technology officer at Vizio, will become Arlo’s CEO.
The separation ought to give the Arlo line more room to grow and more dedicated resources, though it doesn’t necessarily bode well for either company in the long run. Arlo may be a success, but Netgear seems to be spinning it off because it really is the only successful thing it has going. Netgear’s other businesses have seen revenue fall year over year, while Arlo’s revenue has more than doubled. Netgear has claimed that Arlo is growing faster than competing smart home cameras, and whether that’s accurate or not, they’re clearly the company’s bright spot.
Still, there’s reason to question how Arlo will fair as a standalone company. As Fortune points out, small hardware companies like GoPro and Jawbone haven’t had the easiest time competing with tech giants, and Arlo will be, at a minimum, going up against Google and Amazon. And while it has a wide line of security cameras, that’s its only line of business, and it’s something that’s pretty trendy right now.