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Cable Modem Sales Will Reach $1 Billion In 2008: Report

Revenues from cable modem termination system (CMTS) sales recovered last quarter from the slight seasonal slump at the beginning of 2005, and will continue to rise over the next few years, according to a new report from Infonetics Research.

Worldwide CMTS revenues reached $182 million in the second quarter of 2005, back up from the 25% dip the market experienced in the first quarter. Infonetics expects the growth trend to continue, and predicts that CMTS revenues will reach $1 billion in 2008, driven by the requirements of converged network applications, increased capacity and the impending arrival of the wideband Data Over Cable Systems Interface Specifications (DOCSIS) 3.0 specification.

Cisco Systems' impressive 44% revenue surge, and Motorola's 10% quarterly gain account for much of the growth, according to Infonetics. Together with Arris, these vendors control most of the CMTS market. Cisco is, by far, the global leader in CMTS sales, with a 62% worldwide port market share and 58% revenue share, followed by Motorola, with 21% of worldwide revenues and Arris with 15%. Cisco reclaimed the top position in North America with a 48% share of port shipments, followed by last quarter's leader Arris with 25%, and Motorola with 20%

"Cisco, Motorola, and Arris capture 94% of the worldwide CMTS market, so big gains by any of them have a heavy effect on the overall market," Infonetics principal analyst Michael Howard said in a statement. "All three are in a race to lead in North America port share, although Cisco easily takes the number-one spot worldwide."