Sonos also recently filed for an IPO and expressed concern about hosting their services on AWS since Amazon is a competitor. I wonder how many other companies are concerned and looking for alternative hosting solutions as Amazon becomes a bigger player in so many industries. Most, if not all of the players in the same space as Arlo have cloud offerings and many likely run them through AWS servers.
Arlo IPO Filing Reveals Key Financial and Competitive Details
Published Jul 09, 2018 12:49 PM
Arlo is going to IPO at a projected valuation greater than Axis. Now, Arlo has released their 175-page Form S1 Registration Statement for its IPO. Inside this report, we share our results from examining this filling, including:
- What Arlo's 2018 sales are on pace for
- Their explosive user growth in the past 15 months
- How concentrated its sales are to just 3 big retailers
- Why Arlo does not see Dahua nor Hikvision, the two biggest surveillance manufacturers, as competitive threats
- Who Arlo does see as its biggest threat
- How low Arlo's subscription base is
- Where Arlo believes its big next area of growth and differentiation lie
- Where Arlo does best and worst geographically
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Comments (13)
UM
Undisclosed Manufacturer #1
Jul 09, 2018U
Undisclosed #2
Jul 09, 2018While Arlo touts big growth in subscribers, relative to its now nearly 2 million user base and nearly equal growth in user base, it is still tiny...
Though services already account for nearly 10% of their revenue and possibly have a much higher gp than product sales.
JH
John Honovich
Jul 10, 2018But Arlo includes 'prepaid' services in their service revenue, i.e., not actual subscriptions. Their explanation:
Service revenue represents revenue recognized relating to prepaid services and paid service subscriptions. Our prepaid services pertain to devices which are sold with our Arlo prepaid services offering, providing users with the ability to store and access data for up to five cameras for a rolling seven-day period. Our paid subscription services relate to sales of subscription plans to our registered users.
U
Undisclosed #2
Jul 10, 2018Good catch, and there doesn’t seem to be a further breakdown.
One question, if the prepaid service is accounted for per device, what is the 5 camera limitation for?
Do you have to make a new account for camera 6?
JH
John Honovich
Jul 10, 2018For more than 5 cameras, you need to pay, cite:
I suspect that the percentage of Arlo users with more than 5 cameras is quite small.
U
Undisclosed #2
Jul 10, 2018For more than 5 cameras, you need to pay...
I wonder if they would block multiple account creation by incoming IP address of the gateway.
JH
John Honovich
Jul 10, 2018The percentage of people who have more than 5 cameras and would go through the hassle of maintaining 2 accounts to avoid $10 a month is likely quite small and therefore not much of a practical risk.
Also, if the cameras are all on one base / head unit, presumably they would all be a single account..
U
Undisclosed #2
Jul 10, 2018I suspect that the percentage of Arlo users with more than 5 cameras is quite small.
Maybe not that small since
a typical registered user owning on average three Arlo devices.
Of those who do have more than 5, I would imagine that fact does not turn them into willing paying customers.
Apparently though, if you buy two complete kits, you can create separate accounts for each kit, but still you can access all the cameras in one app by using their account sharing feature.
JH
John Honovich
Jul 10, 2018'devices'
I don't see where Arlo makes clear what they consider a 'device' but it may very well include the base station, e.g.:
UD
Undisclosed Distributor #3
Jul 10, 2018This pricing is quite low compared to other video surveillance cloud offerings I've seen. One of the main things that has held cloud application back is the cost compared to just buying a low cost NVR. These prices make the cloud option much more compelling.
SH
Slava H
Jul 10, 2018If you compare apples to apples pricing is quite high actually.
Arlo storage price is based on 10 seconds events in low bitrate. Live stream is on-demand for each camera and connection goes directly to camera.
UD
Undisclosed Distributor #3
Jul 10, 2018Thanks for clarifying. Does that mean if there is continuous activity the recording is done in a continuous series of seperate 10 second files? Do you know the max bit rate or resolution and frame rate video is recorded at?
SH
Slava H
Jul 10, 2018Yes, as of this moment default is 10 seconds recording per event. You can change in settings to record up to 300 seconds per camera.
Bitrate claims: https://kb.arlo.com/3202/How-much-bandwidth-and-storage-space-do-Arlo-videos-use
https://kb.arlo.com/3201/How-much-bandwidth-does-an-Arlo-camera-use-when-it-is-capturing-video
Its easier to use 24/7 continuous recording plans to evaluate actual price: 14days @ $9.99 and 30days @ $19.99.
Of course stream channel (quality settings) for a cloud recording and live view stream channel could be different. Since user connects in Arlo case to camera directly the main cost would be cloud storage. To make complete comparison need to know statistics of average storage used per camera.