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Cisco Commits to Set-Top Sector

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
2/19/2013
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Welcome to today's broadband and cable news roundup.

  • Cisco Systems Inc. has reaffirmed its commitment to the set-top box market after CEO John Chambers stirred the pot last week by saying the company is "walking away" from some deals involving lower-margin STBs. It appears Cisco still views set-tops as integral to the firm's multi-screen Videoscape architecture. Joe Chow, VP and GM of Cisco's Connected Devices unit, clarified in a blog post that Cisco "remains committed to providing world-class managed customer premise equipment (CPE), which includes digital set-tops, intelligent media gateways and other devices." As Light Reading Cable surmised, Cisco's strategy is to focus more squarely on video and data gateways, including a new class of unified gateways that share content with other devices hanging off the home network, such as client set-tops, tablets and smart TVs. (See Cisco Backs Away From 'Low-Margin' STB Deals.)
  • Kabel Deutschland GmbH's pending US$770 million deal for Tele Columbus Group has hit a snag. Germany's federal cartel office, the Bundeskartellamt, has stepped in to block the deal, calling the proposal inefficient. (The federal cartel office requires the divestment of roughly 60 percent of the Tele Columbus networks in Eastern Germany, twice as many as KD offered.) That could open a window of opportunity for Liberty Global Inc., which is rumored to have interest in Tele Columbus and recently acknowledged that it continues to be on the lookout for M&A opportunities. (See More M&A for Liberty Global?)
  • Verimatrix Inc. has scored a deal to provide the security underpinning Com Hem AB's coming TiVo Inc.-powered video platform, which will feature hybrid, IP-capable set-tops. Com Hem is slated to launch it in the spring. (See TiVo Makes IPTV Breakthrough at Com Hem .)
  • Technicolor SA will keep Tata Sky supplied with set-tops after winning two extension contracts with India's largest satellite TV operator, which has 8 million subs. The latest deals include Technicolor's HD-capable MediaPlay DSI715, and standard-definition MediaPlay DSI309 model. — Jeff Baumgartner, Site Editor, Light Reading Cable

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    victorblake
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    victorblake,
    User Rank: Lightning
    2/21/2013 | 3:49:21 PM
    re: Cisco Commits to Set-Top Sector
    First comment is that unless Cisco starts selling tablets, cell phones, and televisions, they do not have anything (in residential) "end to end." Second, I think Cisco's release of Linksys shows they they don't have a real interest in end to end. In my opinion they are not end to end and have struggled with it because at the "ends" most of the technologies are commodities and they do not wish to compete on price.

    I recall many a meeting when Cisco wanted to "understand the applications" for their routers. In reality, they are using their customers to learn about applications. The one "application" Cisco best understands is forwarding IP datagrams. They are good at that -- it is a good business -- and has remained the core of their business -- focus.
    jtombes
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    jtombes,
    User Rank: Light Beer
    2/20/2013 | 3:18:36 PM
    re: Cisco Commits to Set-Top Sector
    Cisco used to talk 'end-to-end' before the SA acquisition. I can't see them ever not talking e2e. But it's a more compelling pitch (at least for service providers doing residential bundles) when you've got an end-device in the home.-á
    Jeff Baumgartner
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    Jeff Baumgartner,
    User Rank: Light Beer
    2/19/2013 | 5:19:00 PM
    re: Cisco Commits to Set-Top Sector
    For Cisco, it all comes back to Videoscape and all-áof its -ápiece parts.-á STBs, even if cable becomes less reliant on them,-áwon't be going away anytime soon, so they'll-á have to remain in the Cisco service provider portfolio for the foreseeable future. But Cisco's clearly not interested in playing small ball... there are still many vendors out there that will. JB
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