Perhaps all Motorola needed was a new home to flourish, or, perhaps all Arris (Nasdaq: ARRS) needed was a piece to add to its technology puzzle to supercharge its video infrastructure business. Whatever the case, it appears that the combination of the two cable equipment powerhouses, formed when Google (Nasdaq: GOOG) sold off the Motorola business late last year in a deal expected to be completed by the middle of this year, is cutting into Cisco's (Nasdaq: CSCO) market share.
Synergy Research Group has produced new data that it said showed the Arris/Motorola video infrastructure business achieving $8.8 billion in fourth quarter revenue, up 3 percent over the final quarter of 2011 and the third quarter of 2012. Cisco video infrastructure revenues, meanwhile, dropped off a bit--although they had hit an all-time high in the third quarter. It also said that the aggregate Arris/Motorola market share increasing to 12 percent. Cisco still leads all vendors with 21 percent market share.
Cisco was first to the acquisition game when it picked up NDS, a move that "saw it firmly cement its position as leader in the video acquisition market," said John Dinsdale, Synergy Research Group's managing director in a press release.
On the other hand, he said, the "bold acquisition of Motorola Home by Arris will see it leapfrog into a clear number two ranking position, well ahead of the chasing pack."
That pack is in pursuit of a pretty big pot of gold. Full year 2012 video infrastructure revenues were more than $34 billion--up 7 percent on the year--led by media data centers (up 15 percent), residential gateways (up 17 percent) IPTV set-top boxes (up 10 percent) and content delivery networks (up 7 percent) the research showed. Even software and middleware revenue grew by 7 percent year-over-year.
"If Arris can effectively manage the acquisition and the merger of activities, it will be in a good position to further consolidate its status in a market which remains highly fragmented," Dinsdale continued. "Going forward, I expect to see more M&A activity and a drive to broadband video portfolios and geographic footprint."
- see this press release
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