Minim, a maker of AI-driven WiFi and IoT security software, has announced the integration of its platform into Motorola-branded router products from Zoom Telephonics, as well as WiFi mesh extenders made by Sercomm.

“There’s a lot to like about Comcast’s xFi solution,” said Jeremy Hitchcock, founder and CEO of Minim, referring to Comcast’s popular WiFi management and IoT security app. “Smaller operators need those kinds of capabilities, too, but if you’re not Comcast, you probably don’t have the resources to build them yourself."

At the Independent Show in Chicago this week, Minim will showcase the Motorola MG8702 Cable Gateway, a DOCSIS 3.1 cable gateway that has an integrated AC3200 wireless gigabit router with Power Boost WiFi amplification. The MG8702 implements Secure Boot for advanced network security and defense against code substitution.

Minim will also be showcasing integration of its platform into the Sercomm RP324 WiFi Mesh Extender.

Minim offers a care portal for operators to provide smart home support and security services to their subscribers, an self-care mobile app for subscribers (in both iOS and Android versions), as well as platform benefits such as firmware management.

“The integration of Minim capability into our Motorola branded cable gateways provides us with a strong competitive advantage in the service provider market,” said Joe Wytanis, president of Zoom Telephonics, in a statement. “Our service provider customers can gain a new source of revenue from home network management tools and can solve the increasing problems introduced by smart home’s using multiple wireless devices. New revenue and higher subscriber satisfaction is a powerful combination provided through our Minim-capable cable gateways.”

Added Hitchock: “A lot of operators are asking, ‘How can I expand what I do?’ And we offer a complete care portal. We can see what’s going on inside the home [network] and help subscribers diagnose problems.”

As far as security capabilities, he noted, “We’ve seen a thousand Nest cameras know what they do… We tailor security for the specific device and what it needs to do.”

Zoom Telephonics has notched CableLabs certification for the MB8600, a DOCSIS 3.1 cable modem that will be sold at retail for $159.99 starting in late May.

Zoom, which has worldwide rights to the Motorola brand for products such as cable modems, gateways, WiFi routers and range extenders, achieved the CableLabs milestone following cert wave 120.

The MB8600 isn’t at retail yet, but it has shown up on this Walmart web page (but not yet available for sale) with packaging indicating that Comcast, which has been expanding the rollout of DOCSIS 3.1, has also certified the product to work on its network. Like other DOCSIS 3.1 modems, the Motorola MB8600 is a hybrid that supports both DOCSIS 3.1 and DOCSIS 3.0 signals. The D3.0 side of the product can bond up to 32 downstream channel and up to eight upstream channels.

Zoom said the MB8600 features four Gigabit Ethernet ports, support for bonded Ethernet ports, and Broadcom full-band capture digital tuning.

Zoom’s new Moto-branded model will tangle at retail with D3.1-certified products from Arris and Netgear. Other vendors to obtain the D3.1 certification stamp from  CableLabs include Hitron, Humax, Askey, CastleNet, Sagemcom, Technicolor, and Ubee Interactive.

On its recent Q1 call, Zoom said more than 5,600 stores are now carrying modems with the Motorola brand as of March 31, and that its cable modem share on Amazon.com has grown from less than 1% at the start of 2016, to over 15%. Zoom’s products are carried in stores such as Best Buy, MicroCenter, Target and  Walmart.

About 10% to 15% of the DOCSIS CPE market is for retail products, according to SNL Kagan’s Jeff Heynen.

For Q1, Zoom posted net sales of $5.1 million, up 89.1% from $2.7 million in the year-ago quarter. That was paired with a net loss of $1.1 million, or 7 cents per share, versus a year-ago loss of $700,000, or 5 cents per share. Zoom attributed the wider loss to increases in advertising expenses, R&D, and Motorola trademark royalties, which rose to $755,000 in Q1, according to company CEO Frank Manning.

Though Zoom is largely focused on the retail market, it has recent embarked on a strategy to expand to service provider sales.

On the call, Manning estimated that $7.5 million quarter revenues represents Zoom’s break-even mark.

RELATED: Zoom Hires Barry Hardek to Head Service Provider Sales

Pushing ahead with a plan to sell cable modems and other broadband products directly to cable operators and other service providers, Zoom Telephonics said it has hired industry vet Barry Hardek to the newly created post of service provider sales director.

The hire expands the sales focus of Zoom, which has traditionally focused on retail sales of DOCSIS modems and gateways. Of late, it’s been using Zoom as its “value brand” and utilizing the Motorola brand for a new line of premium-level cable modems, gateways, and other broadband products.

Retail Modem Market Small, but Active (Subscription Required)

Zoom inked a five-year licensing deal in May 2015 that gave Zoom the exclusive rights to use the Motorola brand in cable modems/routers and set-tops sold at retail in the U.S. and Canada. Zoom has since secured worldwide rights to the Motorola brand for modems, gateways, WiFi routers, range extenders and other WiFi products.

RELATED: Zoom Cable Modems, Set-Tops to Carry Motorola Brand

Frank Manning, Zoom’s president and CEO, hinted on the company’s recent Q3 call that Zoom would add a service provider sales angle to its business. 

“We’re seriously looking at giving it a try,” he said, noting then that Zoom was already in discussions about a potential hire focused in that area. “Think of it as an experiment; [there’s] no guarantees that we’ll be successful.”

Well-known in cable circles, Hardek most recently was managing director of SmartRG’s cable modem business, and has also held senior sales positions at Worldwide Supply, as well as two DOCSIS modem and gateway suppliers -- SMC Networks and Ubee Interactive.

“Barry comes on board at a great time,” Manning said in a statement. “Our Motorola brand cable modems are well-respected, and we now have a broad Motorola product line with excellent performance that is well suited to the service provider market.”

“I’m excited to join a company whose core business is customer premise equipment (CPE) in general, and DOCSIS CPE in particular,” added Hardek. “Zoom has a broad line of cable modems with proven performance, and plans for new cable modem products including DOCSIS 3.1 products.”

Zoom, which competes in the cable modem sector with companies such Arris, Netgear, TP-Link and Belkin/Linksys, said Q3 revenues rose 78% year-on-year to $6 million, driven by sales of its new Motorola-branded product line. 

RELATED: Linksys Reenters Cable Modem Retail Market

Though the vast majority of cable high-speed Internet customers still lease modems and gateways from the operators, vendors have been ramping up their game in pursuit of the smaller retail market.

Zoom Telephonics, for example, is already seeing sales spike following the launch of a DOCSIS modem product line emblazoned with the Motorola brand. Linksys, meanwhile, has reentered the retail cable modem market under its new owner, Belkin.

Both companies are looking to challenge competitors with a sizable lead in the retail market. Arris had about 57.7% of the retail share for DOCSIS modems, followed by Netgear (26%) and TP-Link (3.4%) , according to NPD data from late October. Linksys hasn’t been back in the fold for long, but it has already secured about 5.2% of the market, NPD said.

They are all fighting for a slice of the overall DOCSIS consumer premises equipment market. Jeff Heynen, consulting director and senior research analyst in SNL Kagan’s Media & Communications unit, estimates that retail sales make up 10% to 15% of the total market.

He projected total DOCSIS CPE shipments in North America will hit 24.14 million units, meaning that the retail split this year will likely be in the range of 2.4 million to 3.62 million units.

RENTAL FEE SAVINGS

A Linksys-sponsored survey of 1,007 U.S. adults conducted last year by IDC found that one-in-five consumers purchased their cable modem from a retailer, and three-quarters did so to avoid monthly rental fees.

“People still, by and large, rent their modems through the operators,” Heynen said, noting that cable operators have been adept at bundling in WiFi and managed services, as well as integrated devices that support their VoIP services. “They’ll accommodate [retail], but they certainly won’t go out of their way.”

Linksys formally rejoined the cable-modem retail market in June, debuting a trio of DOCSIS 3.0-based modems based on Intel silicon, including a high-end model that can bond up to 24 downstream channels. Its renewed focus on retail followed Belkin’s acquisition of Linksys from Cisco Systems in 2013 and added it to Belkin’s home-networking business (Cisco acquired Linksys in 2003 for $500 million).

Linksys, which hawks modems at outlets such as Walmart, Best Buy and in its own online store, has seen a “nice lift” in sales since it started selling the new product line in April, a spokeswoman said.

Also making noise is Zoom, which introduced its first Motorola-branded retail cable modem products in February.

The product launch followed a five-year licensing deal announced in May 2015 that gave Zoom the exclusive rights to use the Motorola brand in cable modems/routers and set-tops (as well as cable modems inside set-tops) sold at retail in the U.S. and Canada. Motorola branding rights were previously with Arris, which now uses the SURFboard brand.

Zoom has since secured worldwide rights to the Motorola brand for modems, gateways, WiFi routers, range extenders and other WiFi products.

Zoom, which uses its own moniker as a “value brand,” has already seen a lift from the Motorola brand, which it uses for “premium” level products. Its Q3 revenues reached $6 million, up 78% from the year-ago quarter and up 51% from Q2.

Zoom expects to expand to six Motorolabranded products before the end of 2016. Frank Manning, Zoom’s CEO, said in an interview that the company is also working on a Motorola modem based on DOCSIS 3.1, cable’s new multigigabit platform for hybrid fiber-coax networks, and hopes to submit it to CableLabs for certification testing this year. “All the sales growth is coming from the Motorola brand,” he said on the company’s recent Q3 earnings call.

SHELF SPACE NEEDED

Zoom estimates that it has cable modem placements in more than 5,500 retail outlets, and offers products in stores such as Best Buy, Walmart and Target stores, as well as outlets like Amazon.

“We need to get more SKUs [stock keeping units] and shelf space,” Manning said. He sees $30 million of sales per year as Zoom’s break-even point, and an annual revenue run-rate of $50 million as an “achievable” goal.

He said dislodging incumbents from that shelf space has been “harder than expected … There’s a position of power when you’re on the shelf.”

And though retail is Zoom’s primary focus, Manning also opened the door to direct deals with MSOs. “We’re seriously looking at giving it a try,” he said, noting that Zoom is already in discussions about a potential hire focused in that area. “Think of it as an experiment; [there’s] no guarantees that we’ll be successful.”

Zoom Telephonics inked a deal last year to use the Motorola brand in cable modems, routers and set-tops sold at retail, and the company has since followed through with the launch of a set of products that are being sold at outlets such as Best Buy and Amazon.

Zoom launched three Motorola-branded DOCSIS 3.0 modems late last month:

-MB7220, a model that supports eight downstream channels and four upstream channels.

-MB7420, a D3 modem with a 16x4 configuration.

-MG7310, an 8x4 D3 modem/router with integrated WiFi (802.11ac)  and four Gigabit Ethernet LAN ports.

According to the spec sheets for those products, all three use silicon from Broadcom. Through a quick search at Amazon, the MB7220 lists for $109.99 ($79.99 for Prime members); the MB7420 fetches $129.99 ($89.99 for Prime members); and the MG7310 can be had starting at $166.31.

“We anticipate introducing three additional Motorola products and dramatically expanding the number of retail outlets at which the Motorola products are available during the second quarter of this year,” Zoom president and CEO Frank Manning said in a statement.

With the Motorola brand in hand, Zoom will be looking to create more competition at retail with rivals such as Arris and Netgear. And they'll all have company in the form of Linksys, which last month announced plans to re-enter the retail cable modem game with a set of DOCSIS 3.0-based products that will debut this spring and be powered by Intel Corp.’s Puma 6 silicon. Belkin bought Linksys from Cisco Systems in 2013.

Zoom announced its five-year licensing deal last May, locking in a deal that allowed it to be the exclusive user of the Motorola brand in cable modems/routers and set-tops (as well as cable modems inside set-tops) sold at retail in the U.S. and Canada starting in January 2016. Zoom is essentially taking over Moto branding rights that had previously been with Arris (which bought Motorola Home in April 2013), which is now pushing ahead at retail using its own SURFboard brand. Arris announced last October that it achieved record retail shipments of cable modems and gateways in the third quarter of 2015 (Arris posts Q4 2015 results tomorrow). 

According to Zoom, its initial lineup of Motorola products are available at select Best Buy stores, BestBuy.com, all Micro Center stores, Amazon, as well as through retailers supplied by existing Zoom distributors.

Zoom, which has set up a web site for its new Motorola cable products, said its initial three models have been certified by CableLabs, a requirement for retail distribution, as well as by Comcast, Time Warner Cable, the FCC, and Bureau Veritas.

Speaking on an earnings in November, Zoom president and CEO Frank Manning said the company intended to establish Motorola as its “premium brand,” to use Zoom as its “value brand” for cable modem products.

Zoom envisions plenty of financial upside from the Moto branding deal. Manning said then that Zoom could grow its revenues by “at least $50 million in 2016 with the Motorola brand.” Zoom has not yet posted Q4 2015 results, but it reported Q3 net sales of $3.37 million, with cable modems and gateways accounting for 89% of total revenues in the quarter.

Zoom, by the way, is part of a coalition that is fighting the proposed Charter-Time Warner Cable merger.

Zoom Telephonics president and CEO Frank Manning reiterated Tuesday that the company is on track to launch a new line of Motorola-branded cable modems in 2016, and that it has “at least” five Moto-branded products in the pipeline.

Thanks to an exclusive five-year licensing agreement announced in May, Zoom can use the Motorola brand in cable modems/routers and set-tops (as well as cable modems inside set-tops) sold at retail in the U.S. and Canada starting in January 2016. Zoom will essentially take over Moto branding rights that have been with Arris, which is pushing ahead at retail using the SURFboard brand.

Speaking Tuesday on Zoom’s third quarter earnings call, Manning said the plan is to establish Motorola as its “premium brand” and to continue to use the Zoom moniker as the company’s “value brand” for cable modem products.

Manning also repeated a claim that Zoom can grow its revenues by “at least $50 million in 2016 with the Motorola brand,” as the company looks to amp up competition at retail with rivals such as Arris and Netgear. Manning also estimates that the retail market for cable modems will be worth more than $150 million in manufacturer shipments this year.

Notably, Arris announced that it achieved record retail shipments of cable modems and gateways in the third quarter of 2015. But Arris (and Comcast) recently had to handle a technical hiccup with the SB6190, a retail DOCSIS 3.0 modem that can bond up to 32 downstream channels. After consumers encountered trouble getting the SB6190 to provision and install to the Comcast network correctly, the MSO developed an updated configuration file that created a technical work-around that resolved the issue. 

If Zoom is as successful as it thinks it can be using the Motorola brand, it would mark a huge increase in overall revenues for the Boston-based company. In Q3, Zoom posted net sales of $3.37 million, down 1.1% from $3.40 million in the year-ago quarter. Cable modems and gateways accounted for 89% of Zoom’s revenues in the quarter. Zoom also posted a net loss of $8,000, compared with a net profit of $22,000 in the year-earlier period.

Manning said Zoom is making progress getting five Moto-branded products designed, built and certified for volume shipments starting in Q1 2016 (it needs CableLabs certification to sell DOCSIS modems at retail). “There’s still a lot more to do, but we’re on track,” he said.

Zoom, he said, also has plans to develop modem products based on DOCSIS 3.1, the emerging multi-gigabit platform for HFC networks. But  the timing, he said, will be determined on how rapidly MSOs deploy the technology.

Zoom, by the way, has asked the FCC to deny the Charter- Time Warner Cable merger over concerns about access to third-party modems.

Arris will no longer use the Motorola brand as of the end of 2015, but Arris confirmed that it owns the “SURFboard” brand and will continue to utilize it for retail products.

Motorola has used the SURFboard label on its cable modem products for many years, and Arris, which acquired Motorola Home in April 2013, has been using it in retail products that, of late, have been affixed with both the Motorola and Arris logos (see photo).

Zoom announced this week that it had inked an exclusive five-year license agreement with Motorola Mobility to use the Motorola brand in connection with Zoom’s consumer cable modem products, including cable modem bridges, cable modem/routers and cable set-tops that are manufactured, marketed and sold in the U.S. and Canada, starting in 2016.

Arris said in this blog post that it’s been preparing to take a run at retail without the Motorola banner.

“Since our acquisition of Motorola Home two years ago, we’ve anticipated this transition by accelerating our investment in making ARRIS the trusted name and global leader it is today, the company said. “Now, we’re ready to usher in the next wave of industry innovation under the ARRIS brand…The SURFboard is the most widely recognized and most popular retail cable modem —with more than 135 million sold, covering 90% of the market. It’s the retail standard.” 

Zoom Telephonics is a small company that will soon gain access to a big name brand – Motorola.

Zoom, under an exclusive five-year licensing agreement announced earlier this week, will use the Moto brand in cable modems/routers and set-tops (as well as cable modems inside set-tops) sold at retail in the U.S. and Canada.

The deal, Zoom CEO Frank Manning said Tuesday on a conference call, carries “significant upside with some risk.”

The upside is obvious – Zoom, which sells cable modems and gateways at outlets such as Best Buy, Micro Center, Staples and Walmart, believes it stands to sell more products at retail using a better-known consumer brand.

“We’ll be doing the same for the Motorola brand and we should be able to expand the number of retailers and service providers who buy from us,” Manning said. “This won’t be easy. Zoom will… compete with powerful companies, including Arris and Netgear for shelf space and sales." 

Now, the risks. Zoom has not announced the specific terms of the licensing agreement other than to say it has agreed to pay Motorola Mobility a one-time set-up fee and a royalty based on net sales, but Manning acknowledged that his company has “made significant financial commitments” in doing the deal.

Zoom will be also paying to use Motorola’s brand on products that are already affixed with notoriously thin margins (even with the retail markup), but Manning believes the Motorola label will help it overcome that challenge.

“Even with those [financial] commitments, we believe that Zoom’s cable modem margins after licensing fees should stay the same or increase given Motorola brand's power,” he said.

Zoom, he added, also plans to raise additional funds to provide working capital to finance the growth it hopes to generate with the new branding strategy, but said it was too early to provide those details.

Manning also believes that Arris, which has rights to the Motorola brand through the end of this year, is taking on some risk by leaving the Motorola brand behind.

Arris seems to agrees that it could face some challenges at retail without Motorola on its banner.

“Shelf space in retail outlets can also be impacted by how recognizable a brand is by customers,” Arris said in this recent 10-Q filing. “If we are unable to successfully rebrand those products, our sales in those regions and channels may decrease. Further, the loss of the use of the ‘Motorola’ brand may result in a lower amount of shelf space, or space in less desirable areas, which may impact our sales.”

Arris has been trying to build consumer awareness of its brand through initiatives such as its sponsorship of Carl Edwards in the No. 19 Toyota Camry. But how much Arris truly has at stake at retail is not easy to determine, since the company does not break out how much cable CPE revenues comes in from that channel. On Tuesday’s call, Manning helpfully estimated that Arris’s Motorola brand sales are presently in the range of $50 million to $100 million per year.

Zoom would do well if it’s able to grab just a portion of that, as the Boston-based company generates annual sales of about $12 million. In the first quarter of this year, Zoom posted revenues of $3.06 million, down slightly from the year-ago quarter primarily to reduced sales of dial-up modems.

Arris, meanwhile, is in the cat bird’s seat of cable broadband CPE. According to Infonetics Research, Arris ended 2014 with 36% share of global revenue in the category, followed by Cisco Systems (19%) and Technicolor (13%).

Jeff Heynen, the research director for broadband Access and pay TV at Infonetics, said Zoom and other cable modem makers could see greater opportunity at retail as more consumers cut the pay TV cord and go broadband only, paired with the trend toward rising equipment lease fees.

Manning also discussed Zoom’s plans to use the Moto brand on products other than modems and routers, noting that the roadmap includes CPE that can support cable VoIP services as well.

The branding license also covers set-tops should Zoom decide to branch off in that direction.But don't hold your breath. 

“We're not even sure that we will enter the [set-top] area, but we wanted to have that right to [use] the Motorola brand,” Manning said. “As hard as the cable modem business is to enter, I think the set-top box business is even harder." 

When it comes to cable modems and set-tops, the Motorola brand will endure, at least for a few more years.

Zoom Telephonics announced Monday that it had struck an exclusive five-year license agreement with Motorola Mobility to use the Motorola brand in connection with Zoom’s consumer cable modem products, including cable modem bridges, cable modem/routers and cable set-tops that are manufactured, marketed and sold in the U.S. and Canada.

Zoom said the agreement begins on Jan. 1, 2016, and runs through the end of 2020. Financial terms were not disclosed, but Zoom has agreed to pay Motorola Mobility a one-time set-up fee and a royalty based on net sales during the term of the license deal, according to an 8-K filing.

Arris has been using the Motorola brand as part of an agreement negotiated with Google, which sold the Motorola Home division to Arris in April 2013 for $2.35 billion. Following the closing of that deal, Arris had one year to phase out use of the Motorola brand, but ended up signing a two-year extension. Arris has stressed that it intends to continue selling cable products through retail channels.

Zoom will be taking that brand forward with respect to cable modems and set-tops starting next year, and has plans to develop an “extensive line” of Moto-branded cable modems, Frank Manning, Zoom’s president and CEO, said in a statement.

"Motorola is a leading brand of cable modems at retail, and we're honored and thrilled to be licensing this powerful brand," Manning added. "This license has the potential to grow Zoom's sales dramatically. We are committed to the hard work necessary to take advantage of this significant opportunity to grow Zoom's business, and we are looking forward to working with Motorola Mobility and Motorola cable modem retailers, distributors, and service providers to make this transition smooth and successful for them.”

Zoom has set a conference call for Tuesday at 10 a.m. ET to discuss the agreement in more detail.

Zoom, which already sells a variety of cable modems at retail under its own brand (this DOCSIS 3.0 modem, for example, sells for $69.99 via BestBuy.com), has had some run-ins with cable operators over their respective policies for cable modems sold at retail. 

Of recent note, the FCC, at the request of Zoom, had been vetting Charter Communications’ third-party cable modem certification practices (subscription required). Zoom had filed a petition to deny the now-defunct Comcast-Time Warner Cable merger, but had also asked the FCC to apply a condition that Charter state unsubsidizied pricing for leasing cable modems and not “unreasonably” refuse to allow “nonharmful” modems to attach to its network.

In 2011, Comcast and Zoom jointly filed a request the FCC to dismiss Zoom's complaint about Comcast’s certification testing requirements for modems sold at retail, after the two companies reached a settlement on the issue. Terms of the settlement were not disclosed.