ARRIS brings the idea of broadband home. The company makes communications equipment and components used to enable broadband voice and data transmission and to build television broadcast networks. Products include cable network headend gear, Internet protocol switching systems, modems, and other consumer premises products. It also sells such related hardware as cable, connectors, and other supplies used for mounting and installation. ARRIS primarily markets to large cable-network operators. The company added cable set-top boxes, digital video and Internet TV distribution systems, and other products to its portfolio in 2013 with the acquisition of Motorola Mobility's Home business, which more than triples its size.
The company's organizational structure includes three units: broadband communications systems; access, transport, and supplies; and media and communications systems. ARRIS's broadband communications division, which includes cable modems and termination systems, accounts for 80% of sales, while the company's access and transport systems make up 15%. Media and communications systems provide content and operations management systems, such as video on demand and digital advertising. It makes up 5% of sales.
ARRIS mostly uses contract manufacturers to build its equipment. It currently has contracts with Benchmark Electronics, Flextronics, Pegatron/Unihan, Plexus, and Sercomm, who make its products at plants in China, Israel, Mexico, and the US. In addition, the company has its own plant in Tijuana, Mexico, that makes products for the broadband communications systems and access/transport/ supplies segments.
ARRIS has research and development facilities, sales offices, and support centers in about a dozen countries. The US is its largest market, accounting for 75% of sales.
Sales and Marketing
Cable companies Comcast and Time Warner are its two largest customers, accounting for 12% and 18% of sales, respectively.
Some of ARRIS’s products are not off-the-shelf, and its sales strategy involves product engineering developed specifically for customers. The company also uses resellers, sales representatives, and channel partners in countries without a dedicated sales office.
Overall sales grew 24% in 2012 to $1.3 billion. Both the broadband communications systems and access/transport/ supplies segments saw growth from sales for its DOCSIS3.0 CPE equipment, video gateway products, and metro Wi-Fi wireless products. Sales in the media and communications systems segment were down slightly. The company also recorded profits of $53 million in 2012 after taking a hit in 2011 over taxes.
Mergers and Acquisitions
In 2013 ARRIS acquired Motorola Home from Google-owned Motorola Mobility for $2.35 billion in cash and stock. The complementary business will add consumer video products to ARRIS' expertise in voice and data. The combined entity will boast a much larger customer base and more than three times the revenue.
In 2012 it sold its ECCO electronic connector product line to Eclipse Embedded Technologies, Inc. for about $4 million. It bought BigBand Networks in 2011 for about $172 million in cash to enhance its digital video content capabilities in an effort to broaden its product selection.
ARRIS helps multiple system operators (MSOs) upgrade their networks to better compete with telephone companies and digital broadcast satellite providers. As competitors use technologies such as DSL and last-mile fiber to add additional services, MSOs utilize products from ARRIS to support such functionality as VoIP and on-demand video as more consumers and businesses demand robust streaming video content and services.
In 2013 it became the exclusive distributor of Sling Media products to cable and telecom companies.
The company's strategy also includes expanding internationally into markets outside the cable industry.