Broadband CPE and DSL hardware markets up, CMTS down in 2Q06

Infonetics: The broadband boom continues worldwide broadband CPE sales increased 5% to $1.4 billion in the second quarter of 2006; DSL aggregation hardware sales increased 14% to $1.8 billion; and while CMTS sales dropped 18% to $211 million on the heels of a blockbuster 30% gain in the first quarter, CMTS revenue is up 15% from this time last year and is expected to post strong growth through 2009.

This quarter’s growth in DSL port and broadband CPE unit shipments is proof that the race to build out broadband access networks and sign up subscribers continues unabated, Jeff Heynen, directing analyst for broadband and IPTV at Infonetics Research. CMTS port shipments were also strong, despite falling from last quarter’s record performance, as cable operators expand their footprint and capabilities to both extend their success in signing up voice subscribers and counter the threat posed by telco fiber deployments. The continued deployment of a wide range of CPE again points to the effort by providers to offer tiered services.

Broadband CPE Market Highlights

• worldwide broadband CPE unit shipments are up 5% in 2Q06

• IP set top box sales are up 89% from 1Q06, as more service providers begin volume deployments of IPTV

• worldwide voice CPE sales are up 10%, as more service providers opt for voice-enabled CPE to stimulate ARPU

• Motorola overtook the lead for overall broadband CPE revenue in 2Q06, and Linksys moves from 1st to 2nd

DSL Aggregation Hardware Market Highlights

• worldwide DSL aggregation hardware DSL port shipments are up 8% between 1Q06 and 2Q06

• VDSL continues to grow steadily, but not at rates previously forecast, as ADSL and ADSL 2+ will serve as the primary access method for most subscribers

• IP DSLAM sales are forecast to more than triple between 2005 and 2009, as they are increasingly deployed in new-build areas around the world, especially Asia Pacific

• The number of worldwide DSL subscribers is forecast to reach 274 million in 2009

• Alcatel and Huawei maintain the #1 and 2 spots for worldwide DSL aggregation hardware revenue, respectively, while Lucent jumps up to 3rd

CMTS Market Highlights

• Though the overall quarter saw a decrease in worldwide CMTS revenue, port shipments increased, showing that cable operators continue to build out broadband networks in response to the competitive threat they feel from telco PON FTTH and DSL deployments

• Cisco, Arris, and Motorola (in 1st, 2nd, and 3rd positions for worldwide CMTS revenue, respectively) capture 96% of worldwide CMTS market revenue

• The number of worldwide cable broadband subscribers is forecast to reach 71 million in 2009

DSL Aggregation Hardware Publ 20060830