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Zoom Inches Toward Motorola Cable Modem Launch

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.