Nearly two years ago, it looked like Arlo Technologies (NYSE:ARLO) was ready to branch out into a promising new direction of total home-security integration, potentially challenging the Ring and Nest systems from Amazon (NASDAQ:AMZN) and Alphabet's (NASDAQ:GOOG)(NASDAQ:GOOGL) Google, respectively.

The announcement at last year's Consumer Electronics Show promised a late-2019 debut, but it never materialized. And it now appears Arlo is abandoning the project.

Arlo Technologies security camera devices

Arlo security cameras. Image source: Arlo Technologies.

An all-in-one system

The Arlo Security System promised to be a comprehensive solution. Its Multi-Sensor not only replaced the need for individual sensors on doors and windows, but would also monitor carbon monoxide levels, serve as a smoke detector, and even detect water leaks. It could be programmed to trigger other devices, such as telling Arlo's security cameras to start recording.

The system would also include the Arlo Siren, which would be set off in an emergency, and the Arlo Remote, to arm and disarm the system. The entire system would be controlled through its SmartHub.

At the heart of the SmartHub would be Zigbee and Z-Wave capabilities, low-cost options for creating personal area networks and home automation applications. It also hinted at the potential for a monitored alarm service that would compete with Ring, Nest, and ADT.

Tough competition on price

Amazon makes a very affordable alarm system through Ring. The base five-piece kit starts at just under $200 and comes with optional 24-hour monitoring for just $10 per month. The Nest system starts at twice the price and includes monitoring from Brinks.

The real driver for these systems beyond their affordability is the ability to add on to them, whether it's a video doorbell, security camera, motion and smoke detectors, and more. Although not quite a razor-and-blades business model, they do offer the chance to build out into a more comprehensive system, compatible with Amazon's Alexa or Google's Assistant virtual assistants.

The Arlo Security System seemed to promise a complete package out of the gate. Although Arlo was late to the video doorbell game, it even got there eventually, and its security cameras were already top-notch with 4K capabilities. But now it all seems done for.

A change of heart?

Tech site Zatz Not Funny!, which was the first to discover Arlo's plans to offer a security system, has now revealed Arlo may be killing it. 

The site's Adam Miarka reported Arlo filed a notification with the Federal Communications Commission that it had removed both Zigbee and Z-Wave chips from its SmartHub hardware application.

While noting that it's possible Arlo could still try to challenge Ring and Nest with a security system, Miarka says the company would have to pursue some other communications protocol to do so. Arlo still offers some components to put together a security system of your own, such as cameras and a base station, but it's not the plug-and-play system that was promised, and it seems Arlo is leaving the field.

Doing what it does best

Ring, in particular, seems to be adding to its capabilities. Amazon recently announced the development of Sidewalk, which uses the power of the Ring community to exponentially expand the range of smart devices.

When you opt into Sidewalk, Amazon will use small snippets of the Wi-Fi connections powering Ring devices and share them with the network, expanding the bandwidth available to each user. All done anonymously, it means devices that might have been out of the range of your own Wi-Fi signal can now communicate and work within the network that is created by Sidewalk.

Arlo Technologies still makes quality security components, and though sales were hurt by the pandemic, CEO Matthew McRae thinks the second quarter represents "an inflection point in our subscription business." Still, it looks like the tech stock has chosen to stay in its lane and will leave the comprehensive home security space to Ring and Nest.