Cisco, having determined that its growth in the enterprise has pretty much stalled, has decided that video — from teleconferencing to cable — is the answer to its growth problem. To that end, it’s positioning video traffic as the new data — ready to take over the web. And Cisco is betting that cable operators and carriers panicked by the rise of video content are going to start building their own optimized video networks that the company calls a medianet.
Updated: The sales of Cable modem termination systems (CMTS) declined 32 percent in the third quarter of 2008 to $246 million, according to research firm Infonetics Research. In comparison, $360 million worth of CMTS’ were sold in the second quarter of 2008. One way to interpret this is as yet another data set pointing to a severe slowdown in demand for broadband across the board. We had earlier pointed out that the economic problems were impacting U.S. communications companies, especially those with exposure to hot housing markets. No wonder UBS analyst Nikos Theodosopoulos is projecting global service provider spending will go down by as much as 10 percent in 2009.
Any slowdown could be bad news for gear makers like Arris (s ARRS), which provides broadband gear to companies like Comcast (s CMCSA). At a recent UBS telecom conference Robert Stanzione, Chairman and CEO of Arris, said his “key growth opportunities going into 2009 will be largely centered around DOCSIS 3.0 deployments,” along with sales in the international markets. The company felt that the cable capex could be flat or down net year, but Stanzione said Arris will do well anyway, because it thinks DOCSIS 3.0 will be key priority for cable companies and they will spend on it.
Not so fast. Infonetics analyst Jeff Heynen thinks that with consumers holding onto their purses tightly, the cable companies might slow the rollout of DOCSIS 3.0 wideband services, as “it remains to be seen whether consumers will want to upgrade their broadband connections when budgets are already strained.”