French video-equipment maker Thomson announced Tuesday that it signed a purchasing agreement with Comcast for voice-enabled cable modems for the operator’s continued Digital Voice rollout.
Comcast will use Thomson's DHG535 embedded multimedia-terminal adapters to provide customers with both digital-voice and high-speed-Internet service through a single integrated device.
"As we continue to aggressively deploy Comcast Digital Voice, we're pleased to expand our supplier portfolio by adding Thomson, which has consistently delivered reliable, cutting-edge devices,” Comcast Cable Communications senior vice president and chief procurement officer Peter Kiriacoulacos said in a prepared statement.
Financial terms of the deal between Thomson and Comcast were not disclosed. Thomson, based in Paris, has an existing deal with Comcast to supply data-only cable modems.
The deal “has at least the potential of posing grave danger to Arris’ revenue outlook,” he wrote in a research note Tuesday. “Thomson had generally been somewhat unsuccessful on the VoIP [voice-over-Internet-protocol] cable-modem side when compared to Arris, Motorola and even Cisco, but this Thomson win at Comcast has the potential to be disruptive to Arris in particular.”
Arris declined to comment on the ThinkEquity report. The company is scheduled to report second-quarter earnings Wednesday.
In the first quarter of 2007, Arris reported $91.6 million in revenue from Comcast, or 39% of the equipment company’s overall sales. Comcast announced a deal with Arris in April 2006 to purchase a minimum of 1.2 million eMTAs over two years.
However, Wahlman noted that the actual effect of the Thomson-Comcast deal is unclear. “Of course, it is within the range of possibility that this announcement may mean nothing to Arris because there may not be any volume associated with it … but our best guess would be that the volume would be greater than zero and, thus, have at least some impact, however small,” he wrote.
At the same time, Wahlman raised his 12-month price target on Arris from $16 per share to $18, citing what he said was a good business overall for the company.