Mike, the distributed products division in your post is the TeleWire Supply division.
It is definitely worth mentioning because it the number one revenue generator for ANTEC. Big volume here and it is the nuts and bolts supply division of ANTEC. It's where you would get coax cable, fiber, splitters, taps, drops, F connectors, etc. -- all the standard "guts" of a cable network. Of course, they specialize in the components needed for HFC networks.
Digital Systems, the group that supplies Cornerstone Voice and Data is number 2 in revenue generation now. You are correct that cable modems, especially DOCSIS based, are becoming commodities. But the CMTS you mentioned is anything but. Even though it is standards based, there are presently only 3 (maybe 4) that have achieved certification. There are specific advantages and disadvantages associated with each CMTS solution, and pricing is a factor, unlike the similarly priced modem market. Another factor to consider (and this is a big one) is the VoIP solutions for next generation IP based cable telephone systems rely heavily on CMTS products to terminate and route or bridge the now IP based telephone traffic on the HFC. Just like the data traffic uses the CMTS today, it is essential for VoIP also going forward.
Following extensive analysis of the Q3 CC and the fall in price I've concluded that the overdone drop was due mostly to the dissatisfaction with the fact of 6 straight quarters of falling gross margins. Further examination of the facts, though, reveals that OPERATING MARGIN is at its highest level ever. The market's over-reaction to a single line item on the income statement is, in my opinion, symptomatic of a market that is perilously nervous about earnings and will burn a stock at the drop of a hat these days without serious analysis. |
