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Arris & Moto Dominate D3 Modem Market in 2012

Jeff Baumgartner

Arris Group Inc. and Motorola Mobility LLC combined to lock up 45 percent of all Docsis 3.0 consumer premises equipment (CPE) revenues in 2012, which reached US$1.6 billion, up from $1 billion in 2011, according to a new report from Infonetics Research Inc. Arris led the way with 29 percent of the D3 modem market last year and is poised to tack on Moto's 16 percent with the $2.35 billion acquisition of Motorola Home, the unit that makes Docsis modems, set-tops and broadband access gear. (See Google Sells Moto Home to Arris for $2.35B.) Cisco ended 2012 with 15 percent of D3 CPE revenues, good for third place, followed by Netgear Inc. (11 percent) and Ubee Interactive (8 percent). Here's how it looked in pie-chart form:

Docsis 3.0 CPE represented about 66 percent of all cable broadband CPE revenues in 2012. With Docsis 2.0 models factored in, the market raked in $2.4 billion in 2012, up 26 percent on 2011. Arris had a banner 2012 in part because its largest customer, Comcast Corp., was aggressive with Docsis 3.0 switch-outs of embedded multimedia terminal adapters (E-MTAs) -- Docsis/PacketCable devices that support both cable voice and broadband data services. "Those types of swap outs will continue" this year, predicts Infonetics analyst Jeff Heynen. Despite the big surge in 2012 and the fact that components vendors have seen an early 2013 uptick, though, he expects D3 CPE revenues to be flat in 2013. Wi-Fi, video gateways open opportunities
Although Arris will remain in the D3 CPE catbird seat following its acquisition of Motorola Home, other vendors should have ample opportunity to win share as cable operators try to keep the market competitive by diversifying their product sourcing and supply chains, Heynen said. Opportunities will also emerge as MSOs expand deployments of wireless data/voice gateways as well as a new breed of video gateways that will include Docsis 3.0 cable modems. "Cisco will remain a major player," Heynen said, identifying Ubee, Technicolor SA, Hitron Technologies Inc., Samsung Electronics Co. Ltd. and Pace plc among vendors that are poised to gain ground. Headed and headless video gateways with D3 modems that can bond up to 24 channels -- enough to support max speeds approaching 1 Gbit/s -- represent a "huge wildcard" that could shake things up, Heynen said. "That could throw a monkey wrench in the market share as it currently stands." (See Comcast All-Service Gateways Go 'Headless'.) There's still plenty of revenue for that group to chase down. Infonetics expects video gateway revenues to grow from just $97 million worldwide last year, to $3.6 billion by the end of 2017.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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