SAN JOSE, Calif. -- Due largely to a big fourth quarter budget flush by MSOs in all regions, worldwide CMTS revenue was up 13% from 3Q03 to 4Q03 at $126 million, and port shipments were up 31%. Worldwide cable CPE units increased to nearly 4.3 million between 3Q03 and 4Q03, and revenue increased to $316 million. Year-end and 4Q03 cable data and analysis comes from Infonetics Research's Cable Aggregation Hardware and Cable CPE quarterly worldwide market share and forecast reports.

For the full year 2003, Cisco remains in first place in all regions for CMTS revenue market share, but in 4Q03, Arris for the first time overtook Cisco for the number-one spot in the large North American market (Cisco is still in first place in EMEA, CALA, and Asia Pacific). For the year, Cisco leads in the North American market only by one percentage point due to Arris' solid growth over the past 12 months.

"CMTS revenue will grow in the single-digit percents in 2004 and through 2007 as MSOs expand the bandwidth capacity of their networks and add voice services, led by North America and Europe," said Michael Howard, principal analyst of Infonetics Research and lead author of the Cable Aggregation Hardware report. "Telcos are well aware that cable telephony services are poised for a big rush, and are rolling out VoIP services themselves. This means MSOs will need to continuously upgrade CMTS capacity and function."

CMTS Market Highlights

Cable CPE Market Highlights

"Cable faces stiff competition with DSL for broadband revenue in all regions," said Infonetics Research's Richard Webb, lead analyst of the Cable CPE report. "Despite the pressure, cable CPE continues to grow. MSOs are now pushing cable CPE with 802.11 and/or voice capabilities to attract new subscribers and upsell to existing customers. This will continue driving strong growth for cable IADs and cable routers with 802.11. Although the cable IAD business is still young and volatile, cable IADs will eventually erode the dominance of the basic cable modem. The wireless access gateway market will also continue its fast-paced growth, because as with all 802.11-based products in the consumer market, new subscribers will go straight for a router with fast wireless functionality rather than buy a basic cable modem and later upgrade."

Infonetics Research Inc.