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IoT Stock Crash: Arlo Technologies’ Smart Home Revenue Challenges

Arlo Technologies (NYSE: ARLO) stock declined nearly 50 percent on Wednesday, proving that the rising Internet of Things (IoT) tide may not lift all boats.

Arlo, a spin-off of Netgear, develops¬†network-connected cameras. The company’s product portfolio includes a wire-free¬†smart connected audio doorbell that pairs with Arlo wire-free cameras. And the product pipeline features an overall Arlo Security System for the IoT smart home market.

Arlo’s revenue was $129.3 million in Q4 2018, up 3.6 percent year over year. But the company warned that market growth started to slow significantly in late 2018 — and that triggered a channel inventory buildup.

Then came the real bombshell: For the full year of 2019, Arlo is now forecasting revenue of roughly $380 million to $420 million — a huge shortfall compared to the $600 million-plus that analysts previously expected.

For consumer IT service providers, Arlo offers a cautionary tale about the IoT and smart home markets.

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