& cplSiteName &

Huawei Seen as Likely Moto Suitor

Craig Matsumoto
LR Cable News Analysis
Craig Matsumoto

ORLANDO, Fla. -- TelcoTV -- Speculation around here is that if Motorola Inc. (NYSE: MOT) wants to sell its set-top box and home networking division, the most likely suitor is Huawei Technologies Co. Ltd.

Of course, just because Huawei is the popular pick doesn't mean anything will happen. (See Huawei Seen as Likely Nortel Suitor.)

The rumor, reported by The Wall Street Journal yesterday but unconfirmed by Motorola, is that Moto wants to sell off its home and networks mobility division, which includes its set-top business. The price would supposedly be around $4.5 billion. (See Moto May Be Mulling Set-Top Sale.)

Huawei has that sort of cash, and it's on a big push to crack the North American market on many fronts, including cable. "They want to get into Comcast Corp. (Nasdaq: CMCSA, CMCSK) in a big way," one cable-industry source at the show said.

Huawei still carries a stigma that has carriers and MSOs shying away. But many of them might consider the set-top box to be an innocuous enough play, the source said. Moreover, many set-top models rely on fast, cheap manufacturing, something Huawei is good at.

Huawei already has some cable cred in North America. It's got Digital Terminal Adapter (DTA) and optical equipment deals with two mid-sized MSOs, and a deal to sell wireless gear to Cox Communications Inc. As for those Comcast dreams, Huawei, alongside Ericsson AB (Nasdaq: ERIC), has purportedly won part of the MSO's IMS buildout. Huawei is also angling to get some of Comcast's DTA action. (See Huawei Breaks US Set-Top Seal , Cox, Huawei Make Wireless Connection , and Huawei, Ericsson Get a Piece of Comcast's IMS Action .)

Exhibitors on the TelcoTV show floor late yesterday weren't surprised that Motorola might want to sell the set-top business. They were surprised to hear the business was profitable in the third quarter (operating income of $199 million on revenues of $2 billion), and many said their impression was that the business has been deteriorating. "I'm getting emails, LinkedIns, pings -- morale is s*** over there," the aforementioned source said.

Officials at Motorola's booth declined to comment on the rumor, of course, although Light Reading did catch a joke about the whole booth being for sale.

If Huawei doesn't buy the division, who else might? The price limits the possibilities, but here are some theories that popped up yesterday:

  • Microsoft Corp. (Nasdaq: MSFT): Its cable ambitions go back more than a decade, and many of those early efforts in North America came up short, even after a $1 billion investment in Comcast in 1997. (Microsoft sold off that stake in January 2009.) Microsoft's last meaningful set-top software presence with Comcast ended in 2007 when the MSO switched out the Microsoft TV Foundation platform and guide in Seattle, in favor of a navigation system that Comcast had already deployed in all its Motorola-based cable systems. (See Comcast to Drop Microsoft TV Guide .)

    Industry insiders at TelcoTV said Microsoft, which has turned its Xbox360 into a set-top of sorts using an over-the-top broadband video strategy, has the scratch and the motivation to buy the Moto unit, as it would automatically put Microsoft at the coveted top of the U.S. cable set-top food chain. (See BT Adds to Its IPTV Options, The Xbox X-Factor, BSkyB Offers TV Through Xbox, and Xbox 360.)

  • Ericsson AB (Nasdaq: ERIC): Ericsson outbid Arris Group Inc. (Nasdaq: ARRS) to snare Tandberg Television , giving Ericsson a entrance to the U.S. cable market along with a line of encoders and video-on-demand (VoD) back-office technologies. Snagging Motorola's set-top business would complete the home side of that video picture and counter Arris's recent $20 million purchase of set-top and software specialist Digeo Inc. (See Ericsson Offers $1.4B for Tandberg TV and Arris Digs Digeo .)

  • Cisco Systems Inc. (Nasdaq: CSCO): Cisco came up in conversations yesterday, but it's considered the darkest of dark horses. It's already firmly entrenched in the cable set-top business thanks to its $6.9 billion purchase of Scientific Atlanta almost four years ago (See Cisco to Acquire Scientific-Atlanta.) A Cisco/Moto combo would turn the U.S. cable box duopoly into a virtual monopoly, so such a pairing would have trouble passing antitrust muster, people here predicted.

  • Nokia Networks : Hearing that NSN might be a possible suitor for Moto's set-top business came as a bit of a surprise. But a couple of industry folks here reasoned that NSN may still be smarting after losing the Nortel Networks Ltd. wireless assets to Ericsson, and might view a purchase of the Moto set-top division as a new way to expand its North American presence. (See Nortel Wireless Winner: It's Ericsson!)

    — Craig Matsumoto, West Coast Editor, Light Reading, and Jeff Baumgartner, Site Editor, Cable Digital News

    (6)  | 
    Comment  | 
    Print  | 
  • Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
    Pete Baldwin
    Pete Baldwin,
    User Rank: Light Beer
    12/5/2012 | 3:52:35 PM
    re: Huawei Seen as Likely Moto Suitor

    So, would you be happy having Huawei as your set-top provider?

    Actually, there's an even more basic question to be asked: Would Moto be making the right move by selling the set-top/home networking business?

    User Rank: Light Beer
    12/5/2012 | 3:52:33 PM
    re: Huawei Seen as Likely Moto Suitor

    @Craig...What kind of question is that?

     'Would you be happy having Huawei as your set-top provider?'

    It's not like they're babysitting your kids, feeding them plastic-laced milk and making them eat soup with chopsticks.  When was the last time you looked at your microwave and said, ' Am I happy with Whirlpool as my microwave provider?'  It heats my hot pockets, I'm happy. 

    It's an STB, not exactly rocket science. That being said, I think every potential M&A action in the world starts off with you guys screaming, 'Is Huawei interested in Operator/Vendor X?'  With regards to Huawei you guys are pushing the envelope between rhetoric and reporting.  Let's see what happens.

    ciao for now...



    User Rank: Light Beer
    12/5/2012 | 3:52:32 PM
    re: Huawei Seen as Likely Moto Suitor

    The difference is the following. Motorola while does not have better technology  it does have a one thing and that is  "US public accountability"

    Huawei has no US 'public' accountability that is why we don't want them or fear then taking a bigger share of the market.  The last chinese company that scammed US folks was UTStarcom who is actually listed/delisted but rode the stock up and made fraudlent claims The NET is there is and contiues to be a  trust issues with Huawei there is no visibility of thier lleader on the web site, who are the accountable executives ? 

    Do not misread into what I am saying the same happen to other folks such as Fujitsu NEC etc until they managed to gain the trust as they took over transport solutions etc. The same road will be  travelled by  Huwawei and we end up buying STB from them - I have no doubt they will learn to be assimilated.





    User Rank: Light Beer
    12/5/2012 | 3:52:30 PM
    re: Huawei Seen as Likely Moto Suitor

    @Bollocks...I guess I can understand your argument in a perfect world.  However, 'No US Public Accountability' is not an argument I can accept in reality.  After the ridiculous lack of accountability by US companies operating in the US and employing US citizens which plunged us into a financial crisis...I think the argument of a 'lack of accountability to the US' just doesn't pack the punch it used to.  To think that this should be a prerequisite for doing business in the US is Utopian at best.

    User Rank: Light Beer
    12/5/2012 | 3:52:29 PM
    re: Huawei Seen as Likely Moto Suitor
    Wondering if EchoStar Technologies would kick the tires at Moto? Stranger things could happen.
    User Rank: Light Beer
    12/5/2012 | 3:52:26 PM
    re: Huawei Seen as Likely Moto Suitor

    The reality is if the company execs do wrong then they can and do go to jail, assets are recovered, family shame etc.

    Huwawei execs are immune given their location and residency. (ni implication they are corrupt)

    Today Huawei is a culturally different than the west it is viewed as a "socialist/communist" or anti-wallstreet entity ,if you prefer.

    The question is why do they remain so secrative about their finances and why do they not go Public (A mega IPO I'm sure).

    The Japan tech companies go public in Japan and use an ADR offering in the USA.

    Huawei has something to hide for sure.
    Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
    Wednesday, October 26, 1:00PM EDT
    Security: Tackling DDoS
    Gary Sockrider, Principal Security Technologist, Arbor Networks
    Friday, October 28, 1:00PM EDT
    Security: The Plusses and Minuses of Open Source Software
    Nick Feamster, Acting Director, Center for Information Technology Policy, Princeton University
    Wednesday, November 16, 1:00PM EST
    SDN 101
    John Isch, Practice Director, Network & Voice, Orange Business Services
    Friday, November 18, 1:00PM EST
    SDN & Open Source
    Christopher W. Rice, Senior Vice President of AT&T Labs, Domain 2.0 Architecture and Design
    in association with:
    From The Founder
    Light Reading today starts a new voyage as part of a larger Enterprise.
    Flash Poll
    Live Streaming Video
    Charting the CSP's Future
    Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
    LRTV Custom TV
    Next-Generation Technology Beyond DOCSIS 3.1

    10|20|16   |     |   (0) comments

    At SCTE 2016, Huawei's Liu Jianhua speaks with Alan Breznick for an exclusive interview.
    LRTV Custom TV
    Hybrid Video Solutions to Change TV, Change Future

    10|20|16   |     |   (0) comments

    At SCTE 2016, Huawei's Ian Locke speaks with Alan Breznick for an exclusive interview.
    LRTV Custom TV
    Huawei Future-Oriented Giga Coax Network

    10|20|16   |     |   (0) comments

    At SCTE 2016, Huawei's Allen Wang speaks with Alan Breznick for an exclusive interview.
    LRTV Custom TV
    Huawei at SCTE 2016

    10|20|16   |     |   (0) comments

    Join Alan Breznick of Light Reading and take a sneak peek at the Huawei booth at SCTE 2016.
    LRTV Custom TV
    Assuring Network Quality in a Rapidly Changing Environment

    10|20|16   |     |   (0) comments

    As the rate of change and complexity increases in agile networks, the importance of introducing DevOps methodologies for integrating active test and assurance solutions throughout the full service lifecycle becomes critical to ensure that customers are experiencing the service quality they demand. The industry landscape is changing, and software-based test and ...
    Telecom Innovators Video Showcase
    A10 Networks on Service Providers' Industry Needs

    10|20|16   |     |   (0) comments

    Light Reading's Steve Saunders hears how A10 enables service providers to accelerate, secure and optimize their application delivery to drive down costs, enhance service availability, and better respond to customer requirements, so they can improve customer satisfaction, monetize their network, and grow revenues.
    LRTV Custom TV
    New NFV Use Cases for Cable TV

    10|19|16   |     |   (0) comments

    A large number of NFV use cases are focused on the enterprise domain, looking at virtualization of customer-premises equipment (CPE). To date, there has been little focus on the use cases and business case for virtualization of the video content delivery networks required to deliver unicast and streaming video to consumers. Amdocs commissioned Analysys Mason to ...
    Women in Comms Introduction Videos
    Meet the Future Workforce: New Faces, Expectations & Motivations

    10|19|16   |   5:33   |   (1) comment

    Millennials and their younger peers, Gen Z, expect more out of their network and more out of their work. Intel's Lynn Comp shares how the industry can prepare for this new generation of workers.
    LRTV Custom TV
    ZTE Global Services User Congress 2016 Highlights

    10|19|16   |     |   (0) comments

    ZTE held its 2nd Global Service User Conference in Dusseldorf on October 13-14. Representatives from network operators, leading industry analysts and ZTE senior expertsattended the event, exploring the best practice in managed services and the vision to transform network operations into the operations center of the future (OpCF) in the software-defined networking ...
    LRTV Custom TV
    Cliff Grossner on Cloud & Network Synergy From Carrier Service

    10|18|16   |     |   (0) comments

    Local carriers offer the collaborated cloud and network service that benefits from their understanding of the regulations operating in different vertical markets.
In this interview, Cliff Grossner from IHS Technology talks about how this advanced service can support business agility and flexibility.
    LRTV Custom TV
    VeEX: Live from SCTE Cable-Tec Expo 2016

    10|17|16   |     |   (0) comments

    Cyrille Morelle, VeEX's President and CEO, talks with Light Reading's Alan Breznick live from the SCTE Cable-Tec Expo 2016. They discuss DOCSIS 3.1 technology, deployments and early lessons learned. New products on display include the CX350s-D3.1, CX380s-D3.1, CX310, AT2500-3G, FX150 OTDR and MTT WiFI Air Expert.
    LRTV Custom TV
    Smith Micro's Carrier-Grade WiFi Component

    10|17|16   |     |   (0) comments

    Join Carol Wilson of Light Reading as she interviews the CTO of Smith Micro, Dave Sperling.
    Upcoming Live Events
    November 3, 2016, The Montcalm Marble Arch, London
    November 30, 2016, The Westin Times Square, New York City
    December 1, 2016, The Westin Times Square, New York, NY
    December 6-8, 2016, The Westin Excelsior, Rome
    May 16-17, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Hot Topics
    Verizon Wants More Data on Yahoo Breach
    Alan Breznick, Cable/Video Practice Leader, Light Reading, 10/20/2016
    Attacks Have Major Internet Sites on the Ropes
    Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 10/21/2016
    WiCipedia: Grace Hopper Promotes Diversity, Girl Scouts Code & How to Thrive
    Eryn Leavens, Special Features & Copy Editor, 10/21/2016
    US Issues Total Flight Ban on Samsung Note 7
    Dan Jones, Mobile Editor, 10/15/2016
    Oh Snap! Qualcomm Unveils X50, Its First 5G Modem
    Dan Jones, Mobile Editor, 10/17/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
    There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
    Animals with Phones
    Live Digital Audio

    A vital part of increasing the number of women in comms is transforming the ways companies can support and empower women. While progressive company policies that support both men and women in achieving work-life balance are a step in the right direction, creating a company culture that supports those policies can at times be more challenging.

    During this show, we'll talk to Lynn Comp, Senior Director of Industry and Sales Enabling (ISE) in the Network Platforms Group at Intel, about why those challenges exist and how companies can overcome them. She'll provide insight into how Intel has worked to create a culture that supports work-life balance, and provide steps and guidance for other companies wishing to do the same. We will also leave plenty of time to get your questions answered live on the air.