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Motorola & Arris: Product Gaps & Overlaps

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
12/21/2012
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Executives with Arris Group Inc. and Motorola Mobility LLC's Home unit are eager to talk about their complementary product lines, but their portfolios also present some significant overlaps that will need to be addressed as Arris looks to integrate its $2.35 billion acquisition.

This slide, presented Wednesday night after the deal was announced, illustrates those overlaps. It also shows where Motorola Home could fill some key gaps as Arris gets ready to serve broader ranges of telcos and cable operators.

One big product overlap is the cable access network. Arris is already the No. 2 cable modem termination system (CMTS) supplier, to Motorola's distant No. 3 position. They also have their own projects underway for the Converged Cable Access Platform (CCAP), a super-dense system that will combine the functions of the edge QAM and the CMTS and put all of cable's services under one roof.

Other significant redundancies include video processing, Docsis modems and gateways, advanced advertising systems, guides and video-on-demand servers. Both Moto and Arris make set-tops -- Motorola is the nation's largest vendor, while Arris's share has hardly registered.

Arris has stressed that it does not intend to exit any businesses. Still, it's hard to see how it will retain all of those redundant product lines. One industry insider believes Arris will eventually try to sell some of the overlapping pieces, rather than shutting them down, even if that means arming a competitor.

The planning process ahead of the actual integration next year is just now getting underway (the deal's due to close during the first quarter of 2013), but Arris is not saying if it already has an idea of what will stay or go.

"We're going to do a real thorough analysis of the similarities and differences between the two companies' portfolios," Arris Senior VP of Marketing and Business Development Stan Brovont tells Light Reading Cable.

He says it's quite possible that Arris could end up keeping redundant product lines. "We can both claim to have the same product and call it by the same label, but underneath the products aren't complete replacements of the other because of features and design."

This integration project will of course not be limited to just products. Arris and Motorola Home will also have to consider the fate of a combined base of 7,000 employees, as well as a combined leadership team, which includes Marwan Fawaz, a well-regarded cable engineer and ops exec who took the helm of Motorola Home in June. All of that is TBD.

"We have not announced any final decision about the leadership of the company," Brovont said.

For more

— Jeff Baumgartner, Site Editor, Light Reading Cable



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