Light Reading

Digeo Gives Arris Multimedia Gateway Potential

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner

Arris Group Inc. (Nasdaq: ARRS) execs say they plan to use Digeo Inc. to develop a new breed of "multimedia gateways" that enable MSOs to offer converged IP-based video, voice, and data services. (See Arris Digs Digeo .)

Tying in with cable's "TV Everywhere" strategy, those devices will also be capable of feeding video to other IP-connected displays, serving as a demarcation between the cable network and the "consumer electronics device-influenced home network."

As envisioned, the new gateway, which will incorporate Digeo's video navigation systems and "hosted backoffice service delivery platform," will allow MSOs to blend their own managed video content with video sourced from the Internet, Arris chairman and CEO Bob Stanzione noted during a conference call Wednesday.

But Arris won't be alone in this area by a long shot. Cisco Systems Inc. (Nasdaq: CSCO) and Motorola Inc. (NYSE: MOT), U.S. cable's biggest set-top suppliers, are also developing multimedia gateway products of their own that can blend in IP video applications directly from the MSO and from the wilds of the Internet. Along those lines, Motorola showed off what it calls a "transport gateway" at the recent IBC show in Amsterdam. That QAM-IP combo device cooks in Docsis 3.0, an 802.11n access point, Ethernet ports, two VoIP ports, and four narrowband tuners (for QAM-delivered video).

Stanzione stressed, however, that Arris does not intend to become a "me-too vendor" of gateway products, promising to deliver a next-generation of devices that will help MSOs deal with the "disruption of how video is being delivered via IP."

But don't expect the first Arris-Digeo gateway to show up in cable subscriber homes right away. Arris has already got something cooking in the lab, but it will be 2011 before such a product "becomes mainstream," says Bruce McClelland, president of Arris's broadband communications systems unit. "But it's important to be there first, setting the standard for how this [product] is going to evolve."

Arris also did not exactly give tru2way a ringing endorsement, again raising questions about whether the U.S. cable industry is fully behind the use of the CableLabs -specified platform or possibly pursuing IP-based alternatives that can deliver interactivity and give the industry access to a broad development pool. Arris, McClelland said, is undecided about whether it will tie tru2way to its future gateway products, but noted that "it's not a significant stretch to do that." (See Tru2way at a Crossroads and CableLabs: 'Hundreds' Have Downloaded Tru2way Reference Stack.)

Although Arris thinks the Digeo acquisition as well as the recent purchase of encoding/transcoding specialist EGT Inc. will help it give MSOs the technical tools they'll need to eventually go all-IP, the vendor doesn't expect that transition to happen overnight. (See Arris Gets EGT for a Song .)

"This is not a revolution that's going to happen in the next three months, the next six months," McClelland said, noting that how cable will handle that migration "is still subject to discussion." However, it's expected that MSOs that opt for IPTV will offer those services alongside QAM in a hybrid fashion for some time before flipping the IP switch for good.

More to come?
Digeo gives Arris another piece of the end-to-end IP delivery service puzzle, but Stanzione suggested that the vendor is on the hunt for more acquisitions.

"I wouldn't rule anything out," Stanzione said in response to an analyst question about Arris's acquisition strategy, noting that the vendor will be looking at ways to add to its network and CPE product family.

— Jeff Baumgartner, Site Editor, Cable Digital News

Interested in learning more on this topic? Then come to TelcoTV 2009, the telecom industry's premier event for the exploration of a comprehensive entertainment convergence strategy, to be staged in Orlando, Fla., November 10-12. For more information, or to register, click here.

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Jeff Baumgartner
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 3:55:44 PM
re: Digeo Gives Arris Multimedia Gateway Potential

Investors...them be a fickle sort.  Arris stock ended the day at $12.53 (down $1.16; 8.47%) as folks chewed on the $3M per quarter in the estimated new R&D Digeo will bring to the table.

After-hours trading Wednesday, last check: Arris UP $1.16/9.26%, to $13.69 each.

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