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Moto's Unit Connects in Q1

The Connected Home Solutions unit of Motorola Inc. (NYSE: MOT) was one of few bright spots for the company in the first quarter. (See Motorola's Handset Headache.)

That division, which makes modems, cable and IPTV set-tops, and video-on-demand (VOD) gear, posted sales of $1 billion, up 42 percent from the year-ago period.

The unit also set a quarterly record after shipping 4.9 million "digital entertainment" devices, including 1.1 million digital video recorders.

Motorola CFO Tom Meredith, speaking Wednesday during an earnings call with reporters and analysts, said IP set-top shipments jumped more than 100 percent versus a year ago, citing the company's recent shipment of its 1 millionth IPTV box model.

He added that Motorola moved out 2.6 million voice and data modems in the quarter, with voice-related shipments reaching "just shy of 1 million units."

The vendor also noted that, following the end of the first quarter, it began shipping digital set-tops with slots that support the CableCARD, a separable conditional access system. That system is coming into play as the July 2007 Federal Communications Commission (FCC) ban on digital cable set-tops with integrated security fast approaches.

To meet that mandate, operators are expected to flush out their inventories of integrated set-tops and migrate to CableCARD-capable units. Some MSOs have requested waivers on some low-end, all-digital models with integrated security (such as the Motorola DCT700), lamenting that the CableCARD version of some set-tops will cost on the order of two to three times more than their integrated counterparts. (See Comcast Appeals CableCARD Ruling and FCC to Comcast: 'No Waiver for You'.)

U.S. cable operators are also exploring the less expensive (and less clunky) downloadable conditional access system (DCAS). PolyCipher LLC , a joint venture of Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), and Cox Communications Inc. , is one such high-profile DCAS project. Another is Beyond Broadband Technology, a JV led by a trio of smaller U.S. cable operators. (See Small Cablers Plan Sub-$100 Set-Tops.)

It's highly unlikely, however, that any DCAS-based technology will be ready for commercial availability by the July deadline.

Elsewhere at Connected Home, Motorola's acquisition of VOD vendor Broadbus Technologies is starting to bear some deployment fruit, as Motorola said it surpassed the 500,000 mark in shipped video streams. (See Moto Buys VOD Vendor Broadbus.)

— Jeff Baumgartner, Site Editor, Cable Digital News

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