Global revenue for cable TV broadband gear (CMTS and edge QAM) grew 13 percent to $414 million in the first quarter of 2011, compared to the fourth quarter of 2010. CMTS is the cable network equivalent of a digital subscriber line access multiplexer used by telcos.  

Cisco’s global sales share grew nine percent to 60 percent in the first quarter. Cisco hasn't seen such market share levels in the CMTS market since early 2008, according to Jeff Heynan, Infonetics Research directing analyst.

Cisco also posted strong gains in the edge QAM hardware market, jumping ahead of BigBand to take the number-two spot, while Harmonic (News - Alert) maintained its lead in the edge QAM market. 

“We saw record numbers of CMTS port shipments quarter-over-quarter in 1Q11, up 39 percent worldwide and nearly double in North America, but CMTS revenue failed to keep up due to extreme downward pricing pressure,” said Heynan.

Heynan predicts price reductions will stabilize, and after 2011 a new round of investment  in CMAP will more than offset further price trend. 

Some might wonder whether further market share changes might occur if and when leading cable operators move to an upgraded CMTS platform known as “converged multiservice access platform (CMAP).  The CMAP combines the functions of the CMTS and the edge QAM for all narrowcast and broadcast digital services, especially as regards port density.

Some might argue the CMTS market is mature and robustly competitive, the CMAP upgrade notwithstanding.

Alcatel-Lucent (News - Alert) is reported to be uncertain about whether it will enter the market, though it apparently has been asked to bid. For starters, there are plenty of incumbents, including Cisco. For another thing, though, the market consists primarily of two companies, Comcast (News - Alert) and Time Warner Cable. 

Alcatel-Lucent apparently has been asked to develop the “Packet Shelf” component of the “modular implementation” to CMAP, a product that aims to conserve headend space.

Some observers think Juniper Networks is among the strongest contenders for the modular CMAP, that Cisco will not compete for that segment of the CMAP market, choosing to build an integrated product, as will Arris and Motorola (News - Alert), long-time U.S. cable suppliers. 

Other suppliers are expected to compete in yet a third segment, the CMAP “Access Shelf” product. Harmonic, BigBand Networks and RGB Networks are among the suppliers expected to target that segment of the market.

One might argue that U.S. cable TV executives, always known for being tight-fisted and tough buyers, have carefully split up their requirements in ways that preserve their bargaining power. So one might question the actual profits from the CMAP business. 

There always is some chance one or both major cable operators might change their minds as well (it has been known to happen).

Infonetics Research has in the past pegged the CMTS-plus-edge QAM market at $1.6 billion, ramping up to $2.4 billion in 2015. That isn’t a huge market, by some estimates. Some of us would not be surprised if the CMAP market winds up being smaller than many think, and possibly even smaller than the current CMTS and QAM market. 

Some would argue the market can barely support three suppliers, let alone eight. 

At a high level, cable “needs” the CMAP. But the timing of deployments remains a bit unclear, and buyers will still have the choice of buying modular or integrated versions. 


Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Jennifer Russell