Cisco, Motorola, and Arris Cause Revenue Growth in 2Q04

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Worldwide CMTS revenue grew a solid 18% from 1Q04 to 2Q04.

This is due mainly to very strong performance by Cisco and Motorola in all regions and a solid quarter from Arris in North America, according to Infonetics Research’s Cable Aggregation Hardware quarterly worldwide market share and forecast report. The three market share leaders capture 87% of the worldwide CMTS market, which totaled $425 million in 2003.

According to Infonetics Research’s Cable CPE report, worldwide cable CPE units increased by 15% between 1Q04 and 2Q04, and revenue increased 4% after a 9% drop the previous quarter. Cable units are forecast to increase 21% and revenue 4% between 2Q04 and 2Q05. The worldwide cable CPE market topped $1 billion in 2003.

2Q04 CMTS Market Highlights

— Cisco is the worldwide port and revenue market share leader

— Motorola is the number-two revenue market share leader, having increased their share nicely this quarter

— Arris’ revenue market share is also up a bit, and holds the number-three spot worldwide

— Upstream port shipments increased 29%, and downstream port shipments were up 63% from 1Q04

— The industry average revenue per CMTS port continues to move steadily and regularly downward, from above $2,800 in 2002 to $2,240 in 2Q04; manufacturers will likely add voice and multimedia functions to keep revenue per port above $2,000 through 2007

— 60% of CMTS revenue was from North America, followed by from EMEA, Asia Pacific, and then CALA

“As cable operators add more data capacity and telephony and multimedia services, worldwide CMTS revenue will grow steadily through 2007,” said Michael Howard, principal analyst of Infonetics Research and lead author of Cable Aggregation Hardware. “Competition with DSL providers, especially the large incumbents, is driving much of the growth in this area.”

2Q04 Cable CPE Market Highlights

— Cable CPE unit shipments are increasing rapidly, growing 132% between 2003 and 2007, but due to severe price erosion, revenue will grow only 20% during this period

— Motorola continues its solid lead in revenue market share

— Terayon, Ambit, Thomson, Toshiba, and Scientific Atlanta follow

— Cable modems account for 58% of total cable CPE revenue, followed by cable routers with 802.11, cable IADs, and cable routers

— North America continues to bring in the majority of cable CPE revenue, while EMEA brings in about a quarter, and Asia Pacific about a fifth; this breakdown is similar to the previous quarter, with small shifts in each region

“Worldwide cable IAD units grew 36% in the second quarter, and revenue grew 25%, due largely to voice over broadband gaining momentum in the consumer market,” said Richard Webb, directing analyst of Infonetics Research and lead author of Cable CPE. “We estimate healthy double-digit year-on-year unit growth through to 2007 for this segment.”

Cable Aggregation Hardware tracks CMTS manufacturer revenue, upstream ports, and downstream ports, and follows ADC, Arris, BigBand Networks, Cisco, Motorola, and Terayon. Cable CPE tracks cable modems, routers, IADs, and routers with 802.11, and follows companies such as Ambit, Arris, CastleNet, Cisco, D-Link, Linksys, Motorola, NETGEAR, Samsung, Scientific Atlanta, SMC Networks, Terayon, Thomson, Toshiba, US Robotics, and ZyXel.

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Cisco, Motorola, and Arris Cause Revenue Growth in 2Q04
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