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Arlo Technologies (ARLO) Struck Collaboration Deal To Expand Customer Base

The security equipment manufacturer Arlo Technologies Inc (ARLO) recently entered into a collaboration agreement with Calix Inc (CALX). The strategic partnership news drove the stock price of Arlo to surge nearly 15% on December 8.

Calix is a provider of enterprise applications which will also partner with telecom service providers in the United States and Canada to educate customers about the benefits of home protection solutions for Arlo.

As part of the home Wi-Fi ecosystem, Arlo products will be introduced to a wide audience of Internet providers. Arlo can also speed up sales of cloud services based on the Arlo SmartCloud platform, in addition to cameras and video intercoms.

Investors viewed the news of the partnership positively, as attracting new customers is the basis for Arlo’s growth. The firm continues to grow its customer base, which, against the backdrop of Covid-19, grew even faster. Arlo attracted a record number of clients during the third quarter. The number of accounts paying rose by 58,000, and the overall revenue of Arlo increased by 4% year-on-year to $110 million.

Arlo Technologies’ key product is home IP security cameras with cloud data storage and remote access service connections. Via the cloud, users can access real-time video from cameras or videos. Arlo cameras do not need specialist installation and connection, which increases the potential audience. The cloud service is sold by subscription and offers the opportunity of extra monetization with a steady cash flow.

The danger to Arlo is competition, including from cheap IP video cameras that are sold in large numbers in online stores from various manufacturers. At the same time unknown manufacturers’ security of IP cameras raises doubts among data protection specialists and Arlo has a competitive advantage in the US market.

Arlo Technologies Inc (ARLO) was up 0.72% on Friday to close the session at $8.40. Shares are up 5.13% over the past week whereas that rises to 64.71% over the month.

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