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Cisco, Arris, Harmonic and Motorola head the cable access market but don't expect the next-gen access platform to spawn many new challengers

CCAP Market Is Cisco's & Arris's to Lose

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
5/10/2012
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As cable's next-generation access platform approaches the early deployment phase, there appears to be little chance that newcomers will have much luck knocking incumbents, such as Cisco Systems Inc. (Nasdaq: CSCO), Arris Group Inc. (Nasdaq: ARRS) and Harmonic Inc. (Nasdaq: HLIT), from their pedestals -- even if the market takes off. (See Comcast Issues CCAP RFP .)

That platform, called the Converged Cable Access Platform (CCAP), will give MSOs a super-dense, power- and space-saving architecture that will put all services on the same platform and provide a bridge to a future all-IP world. For CCAP, vendors are developing integrated chassis that combine cable modem termination system (CMTS) and edge QAM functions, as well as more modular, "non-routing" versions that will look alot like dense edge QAMs. Some suppliers, such as Arris, are developing both. (See Cable Rethinks 'Modular' CCAP .)

While the initial hope was that the platform would give players like Huawei Technologies Co. Ltd. , Alcatel-Lucent (NYSE: ALU) and Juniper Networks Inc. (NYSE: JNPR) a reason to jump in, it's increasingly likely that the CCAP market will be led by cable's usual suspects.

"Two to three players in the full CCAP space is about all the market can bear," says Infonetics Research Inc. analyst Jeff Heynen.

There's probably not near enough revenue opportunity for Juniper and AlcaLu to make big R&D investments in CCAP, so they'll likely stand clear. RGB Networks Inc. made that decision awhile ago, bugging out back when CCAP was called the Converged Multiservice Access Platform (CMAP). (See RGB Shelves CMAP Product Plans and AlcaLu Undecided on Cable Gear Opportunity.)

Those that stay and even lead the CCAP charge will have to deal with shrinking margins that have already gripped the current CMTS and edge QAM markets as products become denser and require vendors to use port licensing models that let MSOs activate capacity only when they need it. (See Cisco Pops Pay-As-You-Go CMTS Play.)

That probably means Cisco, Arris, Motorola Mobility LLC (depending on what happens after Google (Nasdaq: GOOG) swallows it) and Harmonic will continue to duke it out for the foreseeable future. (See Cisco, Harmonic Rule Cable Access in Q3 .)

Not that others won't try. Casa Systems Inc. is working on CCAP products, but Heynen believes it will have more success going after emerging, international markets than trying to unseat incumbents.

Casa's "mini" CMTS, introduced last year and targeted to rural areas and multi-dwelling units, could come into play particularly in China. Heynen says Huawei's been talking up a similar kind of CMTS product but doubts it will pull the trigger on a full CCAP strategy.

CommScope Inc. will have a CCAP product that fits the bill based in part on the edge QAM technology it acquired from LiquidxStream Systems Inc., but it will need to land some big deals if it's to be more than an outlier. (See Casa Shrinks Docsis 3.0 CMTS and Why CommScope Bought LiquidxStream.)

Getting big volume deals will be key to any long-term success in general. "Everyone will have to deal with lower margins than they have in the past," Heynen says of CCAP, predicting that margins will fall 10 percent to 15 percent during the first product wave.

— Jeff Baumgartner, Site Editor, Light Reading Cable



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craigleddy
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craigleddy,
User Rank: Blogger
12/5/2012 | 5:33:20 PM
re: CCAP Market Is Cisco's & Arris's to Lose


Aside from Comcast, which has been the lead player for CCAP, I wonder how much interest there is among other MSOs about CCAP versus higher density edge QAMs. I'm sure these vendors are wondering too!


 

Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:33:19 PM
re: CCAP Market Is Cisco's & Arris's to Lose


I think it will depend on the size of the operator and the system.  The big guys and systems will probably add the full CCAPs and redeploy their older CMTS and eQams into the smaller markets.  And the smaller marktes will probably be good candidates for these non-routing CCAP devices, which is probably why we're going to see Cisco, Arris and Mot address both ends.  On the flip side, I don't see Harmonic and CommScope developing integrated CCAP chassis even though their end of the market is probably going to heat up in terms of competition.  JB




 
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