February 23, 2017
Arris has been a top player in the Broadband Access market which till recently has been largely serving households and small-to-medium businesses in North America. With its acquisition of Ruckus’ Wireless LAN business, in one bold move, Arris extends its reach into the corporate world, opens sales channels into Europe and Asia markets, and raises its Intellectual Property in high-speed wireless improving the user experience. With Ruckus’ enterprise-class of products, Arris will be able to offer a full suite of products to its Service Provider customers.
Arris is the fourth largest supplier of Broadband Access equipment market with worldwide sales eclipsing $13 B in 2016, following Chinese manufacturers Huawei, ZTE, and Finland-based Nokia.
Arris dominates the Cable Modem infrastructure market, which is heavily weighted towards North America (holding approximately 55%-to-60% revenue share), but is less competitive in the DSL and Passive Optical Network (PON) market (approximately 10% and 1%, respectively). The PON market is commonly referred to as “fiber-to-the-home” or “fiber-to-the-curb”. The DSL market has been heavily weighted towards Europe, while the PON market has been heavily weighted towards Asia, and China in particular.
With the acquisition of Ruckus, Arris extends its reach into the Enterprise-class Wireless LAN market with worldwide market sales eclipsing $5 B in 2016. Not only does Ruckus enable Arris to offer enterprise-class products to its existing Service Provider customers, Ruckus also brings corporate accounts to Arris, and a conduit to the European and Asian markets with its channel partners. Over the past two years approximately half of Ruckus’ sales flowed from outside North America. Ruckus is the third top supplier in the Enterprise-class Wireless LAN market (at approximately 7% revenue share), following Cisco and HPE.
Looming on the horizon are high-speed wireless technologies which dramatically improve wireless connectivity. In 4Q16 NETGEAR and TP Link began shipping wireless equipment 802.11 ad which supports speeds up to 7 Gbps vs. current speeds up to 1 Gbps. .11ad products will augment existing wireless networks, further reducing the need for cabling. Qualcomm and Quantenna began shipping 802.11 ax chips which supports speeds up to 10 Gbps. By fall 2017 we expect .11ax products to be available, just in time for the new school year.
In sum, we applaud Arris for its acquisition of Ruckus as it complements its business on many levels.