ARRIS announced yesterday that it is to acquire Pace in a deal that is expected to close late in 2015. Synergy Research Group data indicates that in 2014 ARRIS and Pace in aggregate achieved a 17% share of the worldwide video infrastructure market, compared with market leader Cisco's 18% share. The combined ARRIS/Pace would dominate the client hardware segments, while still lagging Cisco in network hardware and video infrastructure software.
Client hardware, or CPE, accounted for 43% of the total video infrastructure market in 2014, and ARRIS and Pace were already the No. 1 and No. 2 ranked vendors in the space. Together they will now be over three times the size of their nearest client hardware rival, Technicolor, in an area where Cisco continues to lose market share. While Pace is one of the two leading client hardware vendors, its position in the network hardware and infrastructure software segments is relatively minor, so the acquisition will not be a great assist to ARRIS in closing the gap on Cisco in those areas.