ARRIS has become the first vendor to ship more than 1 million embedded multimedia terminal adapters (E-MTAs) in a single calendar quarter. In Q1 ARRIS shipped 1,056,373 E-MTAs, integrated DOCSIS cable modems and PacketCable IP phone devices. That's up a whopping 81% from the fourth quarter when ARRIS led the worldwide E-MTA market by shipping 581,272 units.
There are two likely causes for the E-MTA shipment explosion at ARRIS. First, MSOs may have intentionally depleted their inventories in Q4, rather than buy new products, to meet their 2005 capital spending targets. To compensate, they're buying like crazy in Q1. Second, Comcast is finally ramping up its IP phone rollout. In Q1 the MSO added 211,000 IP phone customers, moving its run rate past that of VoIP pioneer Cablevision Systems and within reach of Time Warner Cable.
Two years ago, rather than fight for share in the commodity data-only DOCSIS modem market, ARRIS decided to focus instead on winningt he emerging E-MTA sector, a more technically challenging product category, albeit with the opportunity for higher revenue and margins per device. That decision is now paying off handsomely.