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Decline in Cable Modem Termination Systems

Following a 13 percent increase in the 4th quarter of 2006, the cable modem termination systems (CMTS) market fell 12 percent to $245 million in the first quarter of 2007, reports Infonetics Research in its quarterly "CMTS Hardware and Subscribers" report. Port shipments also were down.

Regardless, Infonetics believes that the CMTS market is expected to pick up and grow annually in the single to low double digits through 2010, when it will reach just under $1.5 billion.

"The traditional first quarter slowdown shouldn't be misconstrued as a general slowdown in the CMTS hardware market. There is no question that MSOs are expanding the bandwidth capacity of their networks via pre-DOCSIS 3.0 wideband solutions to remain competitive with telco DSL and FTTH offerings, and to build on their early success in adding voice subscribers by expanding their range of digital voice services. This will keep investments in upstream and downstream ports on existing CMTS equipment and new M-CMTS equipment growing at least through 2010," said Jeff Heynen, directing analyst for broadband and IPTV at Infonetics Research.

Infonetics market study highlights include:

- The number of worldwide cable broadband subscribers is expected to increase 15 percent in 2007 to over 68 million.

- A small percentage of ports shipped in 1Q07 are wideband (software-configurable).

- Cisco, Arris, and Motorola together capture 97 percent of the worldwide CMTS revenue in 1Q07. In North America, Cisco and Arris each have 42 percent CMTS revenue share.

- North America's share of worldwide CMTS revenue dropped from 62 percent in 4Q06 to 47 percent in 1Q07; EMEA, Asia-Pacific and CALA all gained revenue share.

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