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Cable TV Modems Hit Hard by Downturn

After posting the largest single increase on record in the second quarter of 2008 ($360 million), the worldwide cable modem termination system (CMTS) market dropped 32 percent in 3Q08 to $246 million, according to Infonetics Research.

While the third quarter is typically the slowest quarter for spending on cable broadband aggregation equipment, Infonetics says it was made worse this year by the decision of some cable operators to slow down their purchasing in advance of deteriorating economic conditions worldwide.

Downward price pressure also affected the quarter, reducing overall revenue-per-port.

With housing starts down and consumers digging in for what appears to be a long recession, major operators are beginning to slow their rollouts of CMTS and universal edge QAM (UEQ) ports.

"Although Comcast, Time Warner, Cablevision, and other major North American operators are still moving forward with their DOCSIS 3.0 rollouts, they are doing so with less fervor, as it remains to be seen whether consumers will want to upgrade their broadband connections when budgets are already strained," said Jeff Heynen, directing analyst for broadband and IPTV at Infonetics Research.

Highlights from the Infonetics study include:

- ARRIS is the #1 CMTS revenue leader in North America and Central and Latin America (CALA), while Cisco leads by far in Europe/Middle East/Africa (EMEA) and Asia Pacific, giving them overall worldwide leadership.

- Based on discussions with CMTS vendors and MSOs, Harmonic appears to be the worldwide UEQ market share leader by far, with major wins at Comcast and other large operators.

- BigBand Networks is a strong UEQ player in switched digital video (SDV) deployments, while ARRIS is slowly building on its win at Comcast for UEQ deployments for modular CMTS (M-CMTS) applications.

- The number of worldwide standard and wideband cable broadband subscribers is expected to top 66 million in 2008.

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