Cable TV Equipment Makers Flourish on CCAP Demand - Analyst Blog


Rapidly growing demand for the next-generation Converged Cable Access Platform (CCAP) spells good time for cable TV gear manufacturers. According to a recent report by Infonetics Research Inc., global revenues generated by the CCAP segment rose a significant 42% sequentially in the second quarter of 2014.

The combined shipments of upstream and downstream DOCSIS channels for CCAP, CMTS, edge QAM modulator and coaxial media converts stood at around 1.2 million with a total revenue of $411 million.

CCAP technology helps cable TV operators to maximize bandwidth, simplify the operational structure and evolve according to subscribers' demand. Meanwhile, several analysts have estimated that the CCAP market opportunity may reach around $1.7 billion by 2018.

Major CCAP vendors who will benefit from this trend are Arris Group Inc. ( ARRS ), Cisco Systems Inc. ( CSCO ), Casa Systems Inc., Harmonic Inc. ( HLIT ) and CommScope holding Co. Inc. ( COMM ).

In May 2013, Casa Systems was the first company to commercially introduce an integrated CCAP device. Later, in Jun 2013, Arris declared that Comcast, the largest customer of the company, had started commercially deploying its E6000 Converged Edged Router.

The E6000 router acts as a high-density powerful C4 cable modem termination system (CMTS) for the company which can also be conveniently converted into a CCAP. This eliminates the need for a separate edge QAM device at the cable TV operators' end.

The market for broadband infrastructure is intensely competitive and is prolifically supplied by large companies, like Cisco and Ericsson ( ERIC ). These competitors have extensive product portfolios targeting diversified markets of cable TV, telecom, and satellite TV.

Of late, small players, such as Arris Group, Casa Systems and Commscope are rapidly gaining ground. Increasing market traction of CCAP becomes a future catalyst for these small players.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ARRS , CSCO , HLIT , ERIC , COMM

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