The way to think about it is selling devices (money is made from bulk selling) vs. selling subscriptions (RMM.) If you are going to run a business with a cloud

The way to think about it is selling devices (money is made from bulk selling) vs. selling subscriptions (RMM.) If you are going to run a business with a cloud component, you need to either embed the cost of running that cloud in the price of the device or charge for the service. The Nest thermostat (pre-acquisition) fit the first model, Dropcam (pre-acquisition) fit the second. The camera was expensive because that's what it cost to make a camera with those specs. For comparison, a GoPro that ran basically on the same hardware - slightly different lenses, a sturdier case - was priced at around $400. My guess is Arlo is burning investor money for projected growth, which is a perfectly valid trade-off (for a while.) Don't get me wrong, I agree with you, it was an "expensive-razor-with-expensive-blades" situation, but over time we estimated the razor would get cheaper and the blades (for the same price) would cook your meals and wash the dishes. For the record, I'm far from a millionaire entrepreneur. I'm just lucky enough to have worked at a great company that had a solid product and got sold for a good amount of money. Can't complain about the outcome, but you won't see me buying a mansion in LA any time soon ;)