Why this, and why now? Netgear didn't break down the specifics, but its latest financials tell the story. Where it saw just a $30 million boost in year-over-year revenue last fall and posted a $31 million loss, Arlo was surging -- its revenue was up a whopping 67 percent (to $128.5 million) even as Netgar's mainstay networking businesses struggled. Simply put, Netgear wants to capitalize on that success while it can.

It's a hot market, too. There's fierce competition between Amazon, Nest, Ring and other big names, some of which are taking advantage of AI to tell the difference between a burglar and the family pet. The spin-out could help the Arlo team thrive in a space where it would be all too easy to fall behind.