Juniper Networks has announced that it is killing its G-series line of cable modem termination systems (CMTS) and marketing a comparable product from ARRIS instead.
Juniper entered the CMTS market in November 2001 with the $US200 million acquisition of Pacific Broadband Communications. Juniper entered the market in an effort to broaden its market beyond core routing while simultaneously increasing the market of its routers.
"We have been anticipating this given low market share and a low growth market," UBS Warburg analyst, Nikos Theodosopoulos, said. "[Juniper was] losing money in CMTS.
"CMTS is not strategic to Juniper. When they entered the market through the acquisition of Pacific Broadband, they thought it could help them sell not only CMTS equipment but more routers to cable operators. They have made some inroads on the router side as per the recent Cox announcement, but have very little traction in the CMTS area."
Calls to Juniper were not returned by press time.
The company is now collaborating with ARRIS to co-market Juniper routers to cable multiservice operators alongside Juniper routers. As part of the ARRIS arrangement, Juniper said in a press release it had "voluntarily" discontinued development on its G-series CMTS products, effective immediately. Juniper said it would continue to provide support for the G-Series product in accordance with its standard end-of-life policies and contractual commitments. This support includes software support and repair or replacement of faulty hardware, the company said.
As a result of the product cancellation, Juniper said it wouldincur a one-time charge of about $US10 million to $US15 million due to costs associated with workforce reduction, vacating facilities, contract termination, non-inventory asset impairment charges and other related costs.
Juniper said it was not changing its guidance for its third quarter, which ends September 30.