Netgear’s consumer business is continuing to slide, with the networking Company attempting to dress up a near 10% collapse in consumer revenue as an “intentional strategy” rather than a growing inability to compete in an increasingly brutal home networking market.

The US networking brand reported a 9.5% year-on-year fall in consumer revenue to US$75 million, despite operating in a market where arch-rival TP-Link is facing mounting regulatory pressure in the United States, including moves by US authorities to investigate and potentially restrict the Chinese vendor’s operations.

Instead of capitalising on the weakness of its biggest competitor, Netgear appears to be losing ground as consumers increasingly reject premium-priced networking gear amid aggressive competition from lower-cost Asian brands including TP-Link and ASUS.

The decline was particularly evident in Asia Pacific, where Australia remains Netgear’s biggest regional market. Revenue for the March 2026 quarter fell to US$19.48 million, down sharply from US$22.17 million a year earlier.

Despite weakening demand, the Company continues to try push high-priced Wi-Fi 7 products through retailers including Harvey Norman, JB Hi-Fi and specialist networking while tipping their marketing dollars into their direct sell operation in the hope that consumers buy direct Vs a retailer store saving the Company over 30% in margin.

Management is attempting to frame the revenue deterioration as a deliberate shift toward “higher quality” revenue and improved margins, claiming the Company is prioritising profitability over sales growth.

But analysts are increasingly viewing the move as a defensive retreat from consumer categories where Netgear is struggling to remain competitive.

A major part of the strategy now involves aggressively expanding direct-to-consumer sales while stripping margin and customer relationships away from traditional retail partners.

In markets such as Australia, Netgear is increasingly bypassing retailers and pushing consumers toward its own online sales channels as it attempts to claw back profitability telling insides that the margins that Australian retailers demand when selling the Companies Network gear is “Excessive” compared to other markets.

At the same time, the Company is leaning heavily into subscription-based services such as Netgear Armor, which grew 12% to almost US$40 million in annual recurring revenue.

The strategy comes as component and memory costs continue to surge, with some memory pricing reportedly rising as much as 90% since late 2025 due to booming AI-related demand placing pressure on global supply chains.

Netgear also acknowledged that its legacy Service Provider division is being effectively “harvested” — corporate language for winding down a business in decline.

Revenue in that segment plunged by roughly 33%, with management warning the contraction is expected to continue.

The broader concern for investors is that Netgear’s once-core consumer networking business — built on brands such as Orbi and Nighthawk — is increasingly being viewed as structurally weak as Asian competitors seize market share with cheaper and often faster-to-market alternatives.

Management cited softer consumer demand, seasonal weakness and rising component costs, but industry analysts say the bigger issue is Netgear’s deteriorating competitive position in the global consumer networking market.

Unable to drive meaningful growth in consumer hardware, the Company now appears to be repositioning itself around enterprise networking and recurring software revenue while slowly de-emphasising the traditional consumer business that once defined the brand.