Broadband CPE and Subscribers: PON, FTTH, Cable, and DSL

1.       Global broadband CPE revenue rose sequentially across allproduct segments in 2Q12, with cable CPE up 8%, DSL CPE up 6%, and FTTH CPE up 1%

2.       ZTE eked past Huawei to take the #1 spot for broadband CPE revenue market share in 2Q12, buoyed by strong sales of highend VDSL gateways to European customers including Deutsche Telekom

3.       ARRIS, Technicolor, and Pace are in a virtual dead heat for 3^rd place in the race for broadband CPE revenue market share

4.       Only 1 percentage point separates Asia Pacific, EMEA (Europe, the Middle East, and Africa), and North America for the broadband CPE revenue share lead in 2Q12

5.       Infonetics forecasts there will be 112 million FTTH broadband subscribers by 2016, a 23% compound annual growth rate (CAGR) from 2011 to 2016.

REPORT SYNOPSIS

Infonetics’ quarterly Broadband CPE report provides worldwide and regional market size, market share, forecasts, analysis, and trends for ADSL and VDSL modems, gateways, and IADs; standard and wideband cable modems, gateways, and EMTAs; FTTH ONTs and gateways; residential gateways; PON and Ethernet FTTH ports; and broadband subscribers. Companies tracked include Alcatel-Lucent, ARRIS, AVM, Cisco (Linksys, Scientific Atlanta), Comtrend, D-Link, Dasan Networks, Fiberhome, Huawei, Mitsubishi, Motorola, NETGEAR, Pace, Sagemcom, SMC, Sumitomo, Telsey, Technicolor, TP-LINK, Ubee Interactive, Zhone, ZTE, ZyXEL, and others.

TOP TAKEAWAYS................................................................................................................. 1

Broadband CPE Market: DOCSIS 3.0 Upgrades Push 1Q12 Cable CPE Revenue Up __% from 4Q11; Overall Revenue and Units Up _% from 4Q11 ....................................................................................1

Updated Vendor Guidance on Inventory Rates Results in Long-Term Forecast Increases.................1

Manufacturers and Market Share: ____________________ Lead in 1Q12, Followed by ____________ ............2

SERVICE UPDATES........................................................................................................ 2

BROADBAND CPE: DOCSIS 3 UPGRADES PUSH CABLE CPE REVENUE UP __%; OVERALL REVENUE AND UNITS UP _%........................................................................ 3

Market Size and Forecasts: Cable CPE Shows Strongest Growth in 1Q12, Followed by FTTH CPE, then DSL CPE ..........................................................................................................................................3

UPDATED VENDOR GUIDANCE ON INVENTORY RATES RESULTS IN LONG-TERM FORECAST INCREASES....... 5

Category Analysis: DSL Shifts to Fiber and Cable Stays Consistent..................................................6

Geography: APAC Jumps Ahead of EMEA ....................................................................................7

Manufacturers and Market Share: ____________________ Lead in 1Q12, Followed by________________ ......8

DSL CPE: TOTAL UNITS UP _% QOQ; HEAVIER MIX OF ADSL KEEPS REVENUE FROM GROWING AS MUCH—UP LESS THAN _%.................................................................... 9

Market Size and Forecasts: VDSL Gateways Lead the Way, Followed by ADSL Modems and Gateways............9

Category Analysis: ADSL Rules Now, but Gives Way to VDSL by CY14; WiFi-Enabled Shipments Growing .......12

Geography: Higher-End Units Help EMEA Retain Revenue Share Lead .......................................14

Manufacturers and Market Share: Continued Strength in VDSL CPE Helps Pace Retain Revenue Share Lead ……….15

CABLE CPE: OVERALL UNIT SHIPMENTS UP _% QOQ, REVENUE UP __%, DRIVEN BY __% QOQ INCREASE IN WIDEBAND UNITS.................................................................. 17

Market Size and Forecasts: Wideband (DOCSIS 3.0) Devices up __% After a _% Decline in 4Q11....17

Category Analysis: Wideband EMTAs Once Again Move to the Top of Revenue Share....................19

Geography: Long Term, NA and CALA Stay Flat, while APAC Grows at EMEA’s Expense.................22

Manufacturers and Market Share: After Slow Q4, Strength in EMTAs Helps _________ 1Q12 Revenue Share Lead .................................................................................................................................23

FTTH CPE: ANOTHER SOLID QUARTER DRIVEN BY __% QOQ GROWTH IN 1.25G EPON ONTS; CHINA

CONTINUES TO DRIVE THE OVERALL MARKET......................................................................................... 25

Market Size and Forecasts: Total Revenue Up _% QoQ; Units up _%; China’s Switch to FTTH Will Drive

Dramatic Long-Term Growth.......................................................................................................25

Geography: APAC Once Again Dominates FTTH CPE Revenue ...................................................27

Manufacturers and Market Share: ___________ Top Spot in 1Q12; Strong Shipments __________________________Close Second...............................................................................28

RESIDENTIAL GATEWAYS: REVENUE GROWS _% QOQ, DRIVEN BY DOCSIS 3.0 UPGRADES AND VDSL ........ 29

Market Size and Forecasts: Increases in Wideband EMTAs, VDSL Gateways, EPON ONT RGs Push Overall Category Forward ...............................................................................................................29

Category Analysis: Broadband Gateways Point the Way to Growth ................................................30

Geography: Higher-ARPU Regions Lead ........................................................................................31

Manufacturers and Market Share: Crowded at the Top; ____________ slight lead at _%, ____________

_____________ all close behind at _% each;_____________.......................................................32

BROADBAND CPE MARKET ROADMAP........................................................................... 33

CPE MARKET DRIVERS BY TECHNOLOGY ...................................................................... 34

DSL CPE MARKET DRIVERS.............................................................................................. 34

The Move to Premium Offerings Delivered over VDSL2 .........................................................................34

The Addition of More Revenue-Generating Services, Including IPTV, VoIP, Whole-Home DVR, and Home Automation Services ..............................................................................................................35

The Integration of Home Networking Technologies, Including HPNA, HomeGrid (G.hn), and WiFi ..................36

CABLE CPE MARKET DRIVERS......................................................................................... 36

The Transition from DOCSIS 1.1-2.0 to DOCSIS 3.0 Services, which Will Drive the Growth of All Wideband CPE ...............................................................................................................................37

The Continued Bundling of Voice, Data, and Video Services by Cable Operators, Especially over Newer

Wideband Connections.................................................................................................................37

The Long-Term Move to Video over DOCSIS to Support Broadband Video and "TV Everywhere" Services ........38

RESIDENTIAL GATEWAY MARKET DRIVERS: CONTINUED GROWTH OF IPTV, VOIP, WHOLE-HOME DVR, AND HOME AUTOMATION SERVICES TO INCREASE ARPU................................................................................ 38