About Us

Investors Overview

Harmonic Inc. (Nasdaq: HLIT) is a leading provider of versatile and high performance video solutions that enable service providers to efficiently deliver the next generation of broadcast and on-demand services including high definition, video-on-demand, network personal video recording and time-shifted TV. Cable, satellite (DBS), broadcast and telephone (telecom or telco) service providers can increase revenues and lower operational expenditures by using Harmonic's digital video, broadband optical access and software solutions to offer consumers the compelling and personalized viewing experience that is redefining video delivery. The Company's broad and expanding base of domestic and international customers includes many of the world's largest communications providers.

Industry Trends

Cable television, direct broadcast satellite and telecom service providers who deliver video programming to homes and businesses are engaged in intensifying competition, driving the need for them to offer differentiated combinations of video, voice and data services.

In addition to regulatory reform, the increased competition is driven by a number of important industry trends:
 
  • The increasing demand for personalized and time-shifted content that is facilitated by digital video recorders and network-based video-on-demand services.
  • The growing popularity of HDTV sets that drives demand for additional HDTV content and higher quality standard definition video signals.
  • The constantly growing demand for network access bandwidth driven largely by the increase in HDTV and personalized video services.
  • The convergence of television and Internet-based communication services.
  • The emergence of Internet service companies providing on-demand video to personal computers, portable video devices and next-generation cellular phones.

industry trends

Growth Opportunities in Multiple Markets

Harmonic enables cable operators to upgrade and rebuild their networks to offer advanced digital video services in order to compete with telco and DBS providers, and create additional revenue streams. Digital upgrades allow cable operators to provide more channels and better picture quality than analog video, and to roll out HDTV and new interactive services such as video-on-demand (VOD), high-speed Internet service, residential telephony and business services. VOD services require video ingest, storage and content management, complemented by devices capable of streaming, routing, multiplexing and modulation for delivering signals to individual subscribers over a cable network. HDTV channels require several times more bandwidth than the equivalent number of standard definition channels. As these new services continue to attract increasing numbers of subscribers, cable operators are continuously upgrading their systems in the gradual transition to an all-digital network.

Harmonic helps direct broadcast satellite operators worldwide to establish digital television services that serve millions of subscribers and are capable of providing several hundred channels of high quality video. DBS services operate mostly in a one-way environment, with signals transmitted from an uplink center to a satellite and then beamed to dishes located at subscribers' homes. As cable operators expand the number of channels offered and introduce services such as VOD and HDTV, DBS providers are seeking to protect and expand their subscriber base. These efforts pose significant bandwidth challenges, but advanced MPEG-2 and MPEG-4 digital compression technology allows DBS operators to cost-effectively add new channels and further expand their HDTV channels. Some DBS operators have also launched VOD services either over their own networks or in partnership with broadband service providers.

Harmonic also helps telecom service operators to roll out video services, in part as they address increasing competition from cable operators in their traditional data and voice markets. Many telcos around the world have added video services as a competitive response. Although their legacy copper networks present a significant barrier to providing video services, improvements in video compression technology and DSL capacity have allowed telco operators to introduce multi-channel video-over-DSL services, also known as IPTV. Many major telcos worldwide are now implementing plans to upgrade their networks to offer bundled video, voice and data services.

Harmonic also offers solutions for other video delivery markets. It helps terrestrial broadcasters worldwide to convert from analog to digital transmission in order to free up spectrum and deliver new services, such as HDTV and data transmission. In addition, a variety of Internet service providers and wireless operators are expanding, or planning to expand, into video services, which may offer new market opportunities for Harmonic.

Products and Services

To address these evolving opportunities in different markets, Harmonic offers a variety of industry-leading systems, software and services:

products and services

Content Preparation systems include Harmonic's industry-leading, next-generation encoders that provide high-quality video and high bandwidth efficiency using MPEG-2 and MPEG-4 compression for both standard and high definition signals. These new encoders comply with widely adopted standards to enable interoperability with set-top boxes and conditional access systems and are capable of providing multiple video streams of the same channel in different formats and resolutions, as well as ultra-dense packaging and native IP networking. The Company also offers integrated asset preparation solutions that enable operators to flexibly and efficiently use a variety of signals from real-time and off-line sources, in different protocols, in order to provide personalized video content.

Distribution and Storage solutions include asset management software that enables operators to efficiently manage their digital video infrastructure and reduce operational costs. The Company also offers storage and streamlining solutions for video-on-demand applications that combine automated content ingest, intelligent asset distribution and native IP distribution capabilities.

Customization solutions include stream processing software for the personalization of video content that provides industry-leading bandwidth efficiency and video quality for on-demand services, time-shifted TV, custom mosaic navigation, targeted ad insertion and more.

Edge & Access products enable cable operators to deliver customized broadcast or narrowcast services to subscribers. The Company's industry-leading edge QAM systems integrate routing, multiplexing and modulation for on-demand, switched digital video and high-speed DOCSIS 3.0 data service delivery. Harmonic's wide range of optical transmitters and amplifiers, dense wave division multiplexing systems and optical nodes provide cable operators with flexible bandwidth expansion and leading optical performance for both their residential and commercial subscribers.

Technical Services. Harmonic provides consulting, implementation, project management and maintenance services to its customers worldwide. The Company draws upon its expertise in broadcast television, communications networking and compression technology to design, integrate and install complete solutions for its customers.

Customers and Revenue Mix

The Company has a broad and expanding base of domestic and international customers. Historically, the majority of Harmonic's sales have been derived from cable operators. The Company also provides systems and solutions to satellite operators and, more recently, to telcos and others that have begun to offer video services to their customers.

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