Combined worldwide shipments of cable data and voice modems came close to hitting 30 million units for the first time in 2006

Alan Breznick, Cable/Video Practice Leader, Light Reading

April 20, 2007

6 Min Read
Cable Modem Shipments Set New Record

Combined worldwide shipments of cable data and voice modems came close to hitting 30 million units for the first time in 2006, thanks to rising MSO demand for both standard data-only modems and the newer voice-data combination models.

Total global shipments of Docsis cable modems and PacketCable embedded multimedia terminal adapters (E-MTAs) surged to 29.1 million units in 2006, according to the latest data compiled by Cable Digital News. That represents about a 30 percent jump from the 22.4 million broadband Docsis devices that cable tech vendors shipped in 2005.

As usual lately, E-MTAs, which integrate cable modems with PacketCable IP phone adapters, accounted for the bulk of the growth in Docsis device shipments. As cable operators in the U.S., Canada, and the rest of the world ramped up their rollouts of VOIP service throughout the year, global voice modem shipments nearly doubled to 12.1 million units, up from 6.6 million units in 2005.

Due to such strong growth, E-MTAs accounted for an impressive 41.5 percent of all Docsis device shipments by the leading cable tech vendors in 2006. That's a big hike from a 29.4 percent share in 2005 and a mere 9.6 percent share in 2004.

Worldwide shipments of data-only cable modems also climbed in 2006, albeit far more modestly than E-MTA shipments. Docsis modem shipments rose to 17.0 million units last year, up from 15.8 million units in 2005 and the former peak of 16.1 million units in 2004.

Arris Group Inc. (Nasdaq: ARRS), which took over first place in the rapidly growing E-MTA category in 2005, widened its edge over previous category leader Motorola Inc. (NYSE: MOT) last year even as both companies boosted their numbers substantially. Arris reported shipping 4.8 million voice modems in 2006, slightly more than double its total of 2.3 million E-MTAs in 2005. As a result, the firm captured 40.1 percent of the market, up from 35.7 percent the year before.

Motorola fell further behind Arris in the worldwide E-MTA rankings even though it more than doubled its unit shipments last year and increased its overall market share. Moto shipped 3.7 million voice modems in 2006, up from 1.6 million in 2005. Consequently, it earned a 30.4 percent market share, up from 23.6 percent in 2005.

Third-place Scientific Atlanta also enjoyed a strong year in E-MTA sales, even as it lost ground to Arris and Motorola. S-A shipped 2.4 million voice modems in 2006, up from 1.4 million units in 2005. Yet its market share slipped to 19.7 percent, down from 21.5 percent the year before.

Other leading cable tech vendors also registered E-MTA shipment gains in 2006. But none of the others captured more than 3.9 percent of the overall market.

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Factoring in data-only modems, which still account for almost 60 percent of all Docsis device shipments, Motorola maintained its leadership for another year while S-A narrowly edged out Arris for second place.

Cracking the 10-million mark for the first time, Motorola shipped 10.7 million data and voice modems in 2006, up from 9 million in 2005. As a result, Moto captured 36.8 percent of the market, far ahead of its rival equipment suppliers, although down from 40.3 percent the previous year.

S-A barely kept its hold on second place in the overall Docsis device rankings, staving off a stiff challenge from E-MTA leader Arris. S-A shipped 5.4 million data and voice modems last year, up sharply from 3.4 million units in 2005. Consequently, its global market share climbed to 18.6 percent, up from 15.4 percent in 2005.

Arris -- which finished sixth in the overall Docsis rankings in 2004 and then shot up to third place in 2005 because of its booming E-MTA business -- posted another strong showing in 2006. Arris shipped 5.2 million Docsis units last year, doubling its total of 2.6 million units in the prior year. Not surprisingly, then, its overall market share rose to 17.9 percent, up from 11.8 percent in 2005.

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Looking at just the fourth quarter, combined cable data and voice modem shipments modem came close to scaling the 8 million-unit mark for the first time last fall, smashing the previous quarterly record of 7.37 million units set in the summer. The new total of 7.99 million units represents an 8.5 percent increase from the cable industry’s Q3 count and a 40.1 percent jump from the year-earlier total of 5.7 million units shipped.

As might be expected, E-MTA shipments surged to a new high of 3.6 million units, up from almost 3.1 million in Q3 and more than double the 1.7 million units of the year-earlier period. Thanks to this surge, voice modems accounted for 45.2 percent of all Docsis device shipments in the fall, up from 42.0 percent in the third quarter and 29.2 percent in the last quarter of 2005.

Arris maintained its edge in the expanding E-MTA sector, holding off Motorola. Arris reported shipping close to 1.4 million voice modems, up from 1.3 million the quarter before and 581,000 in the year-earlier period. As a result, it captured 38.0 percent of the worldwide market, down from 42.5 percent in the previous quarter but up from 34.9 percent a year ago.

Motorola came in a strong second in the E-MTA rankings with easily its best results to date. Moto shipped 1.3 million voice modems in the fourth quarter, up from 800,000 units in the third quarter and just 450,000 a year earlier. This performance earned Moto a 36.0 percent market share, up from 25.9 percent in the third quarter and 27.0 percent a year ago.

In its third full reporting period under Cisco Systems Inc. (Nasdaq: CSCO) control, S-A slipped a bit in E-MTA sales, widening the gap with second-place Motorola. S-A shipped 587,000 million voice modems in Q4, down from 673,000 units in the quarter before and 391,000 a year earlier. As a result, its market share sank to 16.2 percent, down from 21.8 percent in the third quarter and 23.5 percent in the year-ago period.

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Despite Arris' continued lead in the E-MTA market, Motorola maintained its dominance of the overall cable modem business globally, thanks to its continued dominance of the data-only modem business. Moto shipped 3.2 million Docsis devices in the quarter, up from 2.3 million in the third quarter and a similar 2.3 million in the year-ago period. As a result, it earned a commanding 40.0 percent market share, up from 31.2 percent the quarter before and even with its share the year before.

Despite its low data modem sales, Arris regained second place in the vendor rankings, thanks to its strong E-MTA shipments. Arris shipped 1.44 million data modems and E-MTAs in the summer, up slightly from 1.42 million in the summer quarter and only 459,000 units in the year-ago period. Its global market share came to 18.0 percent, down from 19.3 percent in the previous quarter but up from 11.7 percent the year before.

S-A, which took over second place from Arris in the overall Docsis device standings earlier last year, fell back to third in the fall. The Cisco division shipped 1.3 million data and voice modems in the second quarter, down from 1.7 million units in the third quarter albeit up from a mere 500,000 a year earlier. Consequently, its market share sank to 16.2 percent, down from 22.9 percent in the second quarter and 17.2 percent a year ago.

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— Alan Breznick, Senior Analyst, Heavy Reading

About the Author(s)

Alan Breznick

Cable/Video Practice Leader, Light Reading

Alan Breznick is a business editor and research analyst who has tracked the cable, broadband and video markets like an over-bred bloodhound for more than 20 years.

As a senior analyst at Light Reading's research arm, Heavy Reading, for six years, Alan authored numerous reports, columns, white papers and case studies, moderated dozens of webinars, and organized and hosted more than 15 -- count 'em --regional conferences on cable, broadband and IPTV technology topics. And all this while maintaining a summer job as an ostrich wrangler.

Before that, he was the founding editor of Light Reading Cable, transforming a monthly newsletter into a daily website. Prior to joining Light Reading, Alan was a broadband analyst for Kinetic Strategies and a contributing analyst for One Touch Intelligence.

He is based in the Toronto area, though is New York born and bred. Just ask, and he will take you on a power-walking tour of Manhattan, pointing out the tourist hotspots and the places that make up his personal timeline: The bench where he smoked his first pipe; the alley where he won his first fist fight. That kind of thing.

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