& cplSiteName &

Huawei Seen as Likely Moto Suitor

Craig Matsumoto
LR Cable News Analysis
Craig Matsumoto
11/12/2009
50%
50%

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
    50%
    50%
    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?

    goldenduke
    50%
    50%
    goldenduke,
    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...


     


     

    bollocks187
    50%
    50%
    bollocks187,
    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.


     


     


     


     

    goldenduke
    50%
    50%
    goldenduke,
    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.

    Cooper10
    50%
    50%
    Cooper10,
    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.
    bollocks187
    50%
    50%
    bollocks187,
    User Rank: Light Beer
    12/5/2012 | 3:52:26 PM
    re: Huawei Seen as Likely Moto Suitor
    Golden,

    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.
    From The Founder
    The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
    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
    Cisco's Innovations in Cable

    5|26|16   |   03:18   |   (0) comments


    Marc Aldrich from Cisco discusses the latest in security, the evolution and momentum for CCAP and what the industry will be seeing next from Cisco.
    LRTV Documentaries
    Leading Lights 2016 Highlights

    5|25|16   |   02:26   |   (1) comment


    Some of the high points from this year's Leading Lights awards dinner at the Hotel Ella in Austin, Texas.
    LRTV Documentaries
    Light Reading Hall of Fame 2016

    5|23|16   |   05:43   |   (0) comments


    Find out who has been welcomed into Light Reading's Hall of Fame this year.
    LRTV Custom TV
    ZTE TM Forum Highlights

    5|23|16   |     |   (0) comments


    ZTE showcased its new ICT solutions at TM Forum in Nice.
    LRTV Interviews
    Gamma's MD on the Emergence of UC2

    5|20|16   |     |   (0) comments


    Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
    LRTV Custom TV
    The Ultimate 5-Minute Guide to Digital Customer Engagement

    5|20|16   |     |   (0) comments


    In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for us the five essential capabilities for successful Digital Customer Engagement. Don’t miss!
    LRTV Custom TV
    NFV in 2016: Part 1 – NFV Use Cases Get Real

    5|19|16   |   05:57   |   (0) comments


    Consensus is building around the key use cases for NFV, including managed IP services at the network edge and on customer premises, which can generate new revenues from enterprises/SMBs and consumers; Evolved Packet Core to support LTE migration; and adjacent technologies, such as TAS and IMS, to support VoLTE and next-generation charging and policy control ...
    LRTV Custom TV
    Nokia's Steve Vogelsang on NFV – Part 3

    5|19|16   |     |   (0) comments


    Steve Vogelsang discusses the challenges of operational transformation and how Nokia helps its customers. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
    LRTV Interviews
    Level 3: Why UC Is In Demand

    5|17|16   |   04:12   |   (1) comment


    Andrew Edison, Level 3's senior VP of sales, EMEA region, talks about the drivers of growth in the unified communications services market.
    LRTV Custom TV
    ARM's OPNFV Action

    5|17|16   |     |   (0) comments


    At the ARM booth at MWC 2016, Joe Kidder and Bob Monkman speak to Light Reading about OPNFV and their upcoming action.
    LRTV Custom TV
    Nokia's Steve Vogelsang on NFV – Part 2

    5|16|16   |     |   (0) comments


    Steve Vogelsang gives advice to service providers on how to move to NFV. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
    LRTV Interviews
    Interoute CTO on NFV's Maturity

    5|13|16   |   06:46   |   (1) comment


    Matt Finnie, CTO at international operator Interoute, explains how NFV has made life easier in terms of logistics and how Interoute can now enable a 'software-defined moment' for its customers.
    Upcoming Live Events
    September 13-14, 2016, The Curtis Hotel, Denver, CO
    December 6-8, 2016,
    June 16-18, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Infographics
    A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
    Hot Topics
    DT: Telcos Must Escape Vendor Prison
    Iain Morris, News Editor, 5/24/2016
    AT&T to Start 5G 'Friendly' Trial by 2016 End
    Dan Jones, Mobile Editor, 5/24/2016
    Cisco's Patel Hails 'Microculture' Successes
    Iain Morris, News Editor, 5/26/2016
    Cable Is Eyeing Its Retail Options
    Mari Silbey, Senior Editor, Cable/Video, 5/25/2016
    AT&T's Margaret Chiosi Retires
    Ray Le Maistre, Editor-in-chief, 5/25/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    Animals with Phones
    Live Digital Audio

    Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.