Arris Group Inc. (ARRS) has become the world leader of the Cable Modem Termination System (CMTS) market. According to a recent report of Infonetics Research, Arris achieved this milestone for the first time in its history during the second quarter. The CMTS market is highly competitive as large broadband gear makers like Cisco System (CSCO) and Motorola (MOT) are also major players. Arris always remains a strong contender for the North American market, but globally it performs poorly compared to its peers.
Arris has established a solid foothold in the rapidly growing CMTS market. The prime reason for this is the aggressive roll-out of DOCSIS 3.0 technology by cable MSOs. As a result of DOCSIS 3.0 implementation, downstream port shipment increased 9% globally during the second quarter compared to the previous quarter. At present, Arris commands approximately 47% of the global CMTS market having taken over the leadership position from Cisco System (39%) and Motorola (10%).
Intense competition among cable operators, satellite carriers and telecom service providers for broadband market share has forced the cable MSOs to opt for cost effective bandwidth enhancing technology for high-speed network. DOCSIS 3.0 (also called Wideband network) is a digital channel bonding technique that creates one larger and faster logical pipe to support throughput of at least 100 Mbit/second. With DOCSIS 3.0, cable operators are now able to offer one of the fastest Internet speeds available in the market.
Arris received significant market traction for its next-generation DOCSIS 3.0 modular CMTS products that provide exclusive video-centric architecture. The company has successfully upgraded its existing C4 CMTS line cards to DOCSIS 3.0. Comcast Corp. (CMCSA) and Cox Communications, the two major customers of Arris, are increasingly deploying DOCSIS 3.0.
Comcast is the largest customer of the company, accounting for 35% of total second quarter revenues. Time Warner Cable Inc. (TWC), the second largest customer (19% of total revenue) of the company, is also likely to follow suit in 2010.
Arris has a strong pipeline of CMTS products, which includes a series of next-generation high-capacity head-end and terminal equipment solutions. The company is also expanding its portfolio of residential products to integrate home networking options for voice, data, and video applications.
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