That shouldn't make it Affero GPL incompatible as long as they make the code available. Regardless, if they own the copyright, they don't need to follow Affero GPL despite licensing it that way; it only applies to those who don't have copyright.
edit: ok it's only the firmware that's being open sourced. Still I think my original comment applies. Maybe a competitor improves code from the firmware and puts it behind the cloud.
You're probably right, but I don't see the harm in making firmware Affero GPL. For instance, intimate communication between two programs tends trigger GPL provisions. So there's an argument to be made that if a competitor improves the firmware for another device with a different cloud-powered backend, then that backend code must be released if the firmware is Affero GPL.
But my original thought was that maybe there's some useful logic in the firmware that's extracted to cloud. And on that point, it's pretty speculative.
edit: ok it's only the firmware that's being open sourced. Still I think my original comment applies. Maybe a competitor improves code from the firmware and puts it behind the cloud.