The intense competition between cable operators

Arris stands to benefit from the intense competition between cable operators, satellite carriers, and telecom service providers for broadband market share. As residential VoIP (Voice over Internet Protocol) and HDTV services continue to grow, operators are dealing with increased network traffic due to robust demand for video download and file sharing.

This massive requirement for data transport is benefiting Arris' sales to cable operators, who are seeking to improve their transport offerings. To boot to the U.S., massive deployment of DOCSIS 3.0 research in Europe and Latin America will as well help its long-term  growth.

The stock price as well soared

The stock price as well soared by more than 45% the last year. Customer concentration remains high for the company. Historically, the two major customers, viz, Comcast Corp. and Time Warner Cable Inc. , accounted for near 50% of total revenue. Loss of any of these clients would materially impact the company's top-line growth.

Arris is by degree diversifying its operations in the international markets. In the 2010, international businesses represents 35% of total revenue comapred with just 26% in 2009. Management forecasted that international sales will account for more than 40% in 2011.

However, Arris is solely dependent on cable operators for its revenue. Lack of industry diversification may result in limited business prospects. Potential shifts in industry dynamics may adversely impact cable TV service providers.

The fact that large telecom carriers in the U.S.

This is evident from the fact that large telecom carriers in the U.S. are increasingly expanding their high-speed fiber based network and satellite TV providers are as well upgrading their networks. Cable MSOs are by degree losing their basic video clients to low-cost satellite TV and Internet video service providers.

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