D3 CPE Shipments on the Upswing

12:45 PM -- One of the more interesting nuggets to come out of Arris Group Inc. (Nasdaq: ARRS)'s first-quarter conference call Thursday was that the vendor is starting to see some shipment pickup for Docsis 3.0 cable modems and VoIP-capable embedded multimedia terminal adapters (EMTAs).

The company said 14 percent of its Docsis customer premises equipment(CPE) shipments in the period were of the wideband variety. Arris shipped 1.05 million Docsis voice modems and 121,402 data-only cable modems in the period, so the math suggests that the vendor shipped at least 164,000 wideband CPEs in the quarter.

It's still a drop in the bucket compared to Docsis 2.0 CPE shipments, but the momentum is starting to shift in D3's favor. In February, Arris reported that less than 10 percent of Docsis CPEs shipped out in the fourth quarter of 2009 were juiced for wideband. (See Arris Expects Less From Comcast in 2010 .)

The rise in D3 CPE shipments isn't necessarily a surprise. After all, MSOs presumably will be signing up wideband subs in greater numbers after they get their networks upgraded. Arris's figures provide us with a nice snapshot of what's happening.

What's harder to determine is where it's happening, since the company doesn't say how many of those CPEs are being shipped to US MSOs compared to the rest of the globe, including the speed-crazed Japanese market, where Docsis 3.0 services sell for a small premium over the next lowest speed tier. Most D3 tiers in the US still sell in the neighborhood of $100 a month. (See Wideband: Priced to Move .)

Bonding with D3
Another interesting trend that came up was how MSOs are allocating the channels they are bonding for Docsis 3.0. The minimum specs require the capability to support four upstream and four downstream channels, though we're starting to see modems with the ability to bond eight downstream channels, with 16 on deck.

But instead of bonding all those together to create a massive data pipe, some operators intend to break them into application-specific groupings as MSOs pursue the delivery of IPTV services.

"Longer term, the thought process is really to take a broad set of channels -- eight channels, 16 channels -- and not so much bond them together in one big pipe, but to break them into several different applications, service groups perhaps, [with] one that's focused on best-effort data and one focused on a managed IP video service," Bruce McClelland, president of Arris's broadband communications systems unit, said on Tuesday's call.

He didn't go into product details, but that sort of thinking will likely fit inside a new type of wideband-fueled, hybrid gateway that can speak both RF and IP video. (See Digeo Gives Arris Multimedia Gateway Potential .)

— Jeff Baumgartner, Site Editor, Light Reading Cable

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