Netgear plans spin-off of its Arlo smart home products into separate company

The security camera race just got interesting

Netgear is planning to spin off its Arlo smart home division into a separate company.

Arlo's security cameras are a well-regarded but expensive option for home security, and Netgear clearly feels confident enough in them to let them stand on their own.

Netgear's profits have shrunk in recent years, but they have been bolstered by the Arlo division.

What's slightly worrying is that the independent Arlo will be in direct competition with the likes of Amazon, Google, with its newly reabsorbed Nest division, and the UK's biggest smart home brand, Hive, which has recently started its push into the US and beyond with a shiny new camera.

The new company, Arlo Technologies, will be affected by an IPO of under 20 per cent of common stock, with Netgear to retain a majority, controlling stake.

Matthew McRae has been announced as CEO of the new company which is expected to be set up in the second half of 2018.

Arlo cameras are amongst the most versatile on the market and one of the few that can integrate with other smart home infrastructures, such as Samsung Smartthings.

Security cameras are one of the areas of the smart home world that still desperately needs work - while the cheap end of the market is flooded with insecure kit.

At present, almost all smart-home security cameras require an additional subscription and are completely incompatible with each other.

In recent months, several players have had to revisit their business models, with both UK company YCam and US startup Canary taking heat for changing the terms of their free service to require more regular payments.

Arlo seems to have struck the right balance. Although it does offer a cloud option, it is far less crippled if you choose not to take it, and this is reflected in the higher asking price.

Unfortunately, the downside is that Arlo's wireless cameras use a lot of quite expensive batteries, but such is the price of versatility. It still seems to be paying off for them.