Cisco and Arris Take Different Directions in Video Leadership Battle
RENO, NV, December 14, 2015
New Q3 data from Synergy Research Group shows that the battle for video infrastructure leadership will remain close after the current flurry of acquisition deals is complete. Technicolor completed the acquisition of Cisco’s video CPE business in November and the Arris acquisition of Pace is now virtually guaranteed to proceed. In Q3 Arris and Pace in aggregate generated video hardware revenues that were just 5% short of Cisco’s total video hardware revenues. Had Cisco’s CPE business already been divested, then Arris/Pace would have been 17% ahead, though Cisco would still be the second-ranked video hardware vendor thanks to its dominance of the network hardware segments. Meanwhile Technicolor’s share of hardware revenues would jump to almost 8% if it included the acquired Cisco assets. On the software side of the market Cisco’s share is over 20% and far ahead of its nearest rivals – Nagra and Arris.
The current M&A deals are being driven by changes in the client hardware (or CPE) market. Revenue growth has mostly gone from this mature market and success is predicated on the ability to generate margins from high-volume global operations. By contrast the network and software sides of the market continue to grow steadily but require a different business focus.
“While in some senses Cisco and Arris will remain direct competitors, it is clear that their strategies are fundamentally different and they are headed in distinctly divergent directions,” said John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group. “Cisco is doubling down on all things cloud, network and software, and being a major player in a high-volume CPE business does not sit well with that strategy. Arris has clearly decided that its future lies in carving out a large share of the global video client device market.”
About Synergy Research Group
Synergy Research Group, now part of TechInsights, delivers quarterly analyses of global IT and Cloud markets, offering detailed breakouts of vendor revenues and shipments by segment and region. Market shares and forecasts are provided through Synergy Interactive Analysis (SIA™) — the industry's only fully proprietary SaaS platform purpose-built for market share and forecasting analytics.
For more than 25 years, Synergy has been a trusted source of quantitative research and market intelligence across emerging communications and technology sectors. By combining syndicated research with specialized consulting, we deliver actionable intelligence to marketing and strategy executives worldwide.
A trusted source of accurate market data, Synergy is cited by industry leaders as well as leading financial, business, and trade publications such as The Economist, The New York Times, The Wall Street Journal, United States Federal Reserve Board, NPR, Forbes, Bloomberg, Financial Times, Bank of England, Fortune, and The Guardian.
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