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Arris to Bring Advanced Products

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Arris Group Inc. (ARRS - Free Report) plans to present its end-to-end video, data and voice solutions to the IBC Exhibition and Conference, between September 7 to 11 in Amsterdam, Netherlands.

In the exhibition, ARRIS will exhibit smooth functioning of content delivery by supplying service providers with improved capacity and a seamless migration path between legacy service delivery and next-generation IP networks.

During the exhibition, ARRIS intends to give demonstration on innovative products like ARRIS VIPr, an advanced video processing platform, a next generation video transcoder generating video streams in multiple bit rates, multiple formats and multiple resolutions in order to support multi-screen, high quality HD/SD video delivery.

The ARRIS Whole Home Solution, which is a centralized triple-play gateway solution comprising a media gateway, players, Moxi® user interface and cloud services portal, escorts the personalization and management of home entertainment and media to an entirely new level.

A few days back, ARRIS posted solid financial results for the second quarter of 2012, handily beating the Zacks Consensus Estimates. Arris Group benefited as several cable MSOs upgraded their customer premises equipments (CPEs) with high-speed DOCSIS 3.0.

Arris completed the acquisition of BigBand Networks Inc. We believe the acquisition of BigBand is a major step by Arris to convert itself as an all IP-converged network architecture solution provider.

However, we believe the market for broadband infrastructure offerings is highly competitive and is prolifically supplied by large companies, including Google Inc. controlled Motorola Mobility, Cisco Systems, Inc. (CSCO - Free Report) and LM Ericsson.

These competitors have broader product portfolios targeting diversified markets of cable TV, telecom, and satellite communications. Diversification into digital video market may not generate expected results since all these bigger rivals already have strong footings in the business.

Moreover, higher startup cost of the newly launched products coupled with limited customer base will continue to act headwind for the company going forward. We, thus maintain our long-term Neutral recommendation on ARRIS.

Currently, ARRIS has a short-term Zacks #3 Rank (Hold) on the stock.

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