This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

NetGear CEO Lo Says 'Internet of Things' is the Place to Be

Stocks in this article: NTGR CSCO

NEW YORK (TheStreet) -- NetGear  (NTGR) CEO Patrick Lo has grown tired of all the breathless talk about cloud computing bolstering the prospects of Internet security stocks. In Lo's view, the next really big thing will be the 'Internet of Things.'

"We've heard so much about the 'Connected Home', we've heard about Wi-Fi connected smoke detectors and cameras, as well as thermostats," Lo said in an interview. "That's the beginning of the connected home, the 'Internet of things.' And we believe absolutely in the next two, three years, that will become more and more popular, and that will drive more and more sales of interconnecting devices such as ours."

Lo is betting that such focus can revive the fortunes of a stock price that has gained 2.8% over the past 12 months while the Nasdaq surged 31%.

Netgear's chief rival, Cisco  (CSCO) hasn't fared much better, rising just 1% over the same period. Yet while Cisco is concentrating on connecting 'things' in the office, Lo's company is looking at the home as it looks to design new gear. One such product, called the 'Nighthawk,' is designed to prioritize Internet speeds according to type of device.

The Nighthawk tri-band router, which is based on Broadcom's  (BRCM) XStream technology, is expected to be available this summer.

"What it does is provide three lanes of traffic," Lo said. "The very slow one for the very slow devices, the mid-range and the high-end for the Netflix  (NFLX), or for the gamers you can go to the higher speed without being bogged down by the slowest speed devices. It's a breakthrough and it's the precursor for the real Internet of things at home."

In other words, the gamers get the equivalent of an HOV lane. And speeding things up is high on Lo's agenda, especially during the spring and summer when sales are typically slow. Sales in the company's first quarter jumped 24% due to holiday buying though Lo doesn't expect second-quarter growth to post that high.

"The purchases generally are a lot slower, especially among consumers in Europe," says Lo. "We do believe in Q3 with the arrival of the Nighthawk X-3, that we'll be on much firmer and better footing on the retail side."

NetGear is also banking on its service provider business following deals with U.S. Cellular and Sprint  (S), though he acknowledges that expectations are high for this unit to compenstae for slowness in the company's commercial and retail lines.

"Those deals are really, pivotal because we are providing them with something we call the LTE 4G router," Lo said. "Today, if you really want to get 30MB, 50 MB or 100 MB, you either subscribe to Fiber or you subscribe to VDSL. That's assuming you live in cities, where there is wired infrastructure. If you are living in a rural area, however, that's not an option. With this LTE 4G router, you have the option to get 40MB or 50MB beamed down through wireless into your housing in rural areas. That's a breakthrough we believe will have a significant impact in the future."

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,649.96 +293.09 1.69%
S&P 500 2,044.70 +31.81 1.58%
NASDAQ 4,726.1110 +81.7990 1.76%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs