Ex-Cisco Execs Form Cable Set-Top Startup
If operators buy in, iNovo would set the stage for fresh competition against cable's incumbent set-top suppliers, especially Cisco, Motorola Mobility LLC and Pace plc .
A startup's lower overhead and lack of an installed base will let Duluth., Ga.-based iNovo provide CPE gear "at a very competitive price," said CEO Jack Miller, during an interview at The Cable Show last week in Boston.
Miller worked for Scientific-Atlanta for nine years before starting N2 Broadband, a video-on-demand (VoD) backoffice vendor that was sold to Tandberg Television in 2004 for $118 million and is now part of Ericsson AB (Nasdaq: ERIC)'s video product lineup. He and Himanshu Parikh, iNovo's CTO and a former VP and GM at Cisco/Scientific-Atlanta, are the principal founders of iNovo, and they began assembling their team about a year ago.
Most of the iNovo team also hailed from Cisco/Scientific-Atlanta and is comprised of cable vets who have not just designed, managed and sold cable CPE, but have also managed relationships with manufacturers such as Foxconn Electronics Inc. , Askey Inc. and Unihan Corp.
Ajith Nair, iNovo's VP of engineering, helped develop SA's first set-top box and was the main hardware architect for eight generations of boxes. Doug Woodhead, the company's principal engineer, directed the ASIC development group at Cisco/S-A. And Benny Hsu, iNovo VP of manufacturing partners, once managed the offshore, high volume manufacturing relationships for Cisco's home networking business unit.
"We have all the disciplines and experience needed to compete in the CPE business," Miller said.
Shaking things up
iNovo arrives amid a cable set-top shakeup. Google (Nasdaq: GOOG) acquired Motorola Mobility, and Panasonic Corp. (NYSE: PC) recently exited the domestic cable set-top business. Cisco recently sold its set-top box factory to Foxconn but keeps saying that it remains fully committed to the set-top box market. (See Google Closes $12.5B Motorola Deal , Will Moto Go Back to the Future?, Foxconn Buys Cisco's Set-Top Factory , Panasonic Exits US Cable Set-Top Biz and Why Cisco Wants Out of Set-Tops (Or Not).)
"There's a lot of turmoil in the market," Miller said, and iNovo took advantage of it as Cisco scaled back its operations on Sugarloaf Parkway in Lawrenceville, Ga. "There were some very good people available."
Miller thinks iNovo has the institutional knowledge and technical know-how to take MSO-defined CPE specifications through the hardware integration and building phases by shepherding that work through the manufacturers -- expertise that cable operators don't have.
iNovo got off the ground last November, has already shipped one product to a customer for evaluation and hopes to notch its first deployment deals before the end of 2012, Miller said. He's mum on which product is being evaluated, but the company lists a sizable lineup of CPE categories it's pursuing, including standard- and high-def digital transport adapters (DTA), IP-based set-tops, Docsis modems and gateways, and indoor and outdoor Wi-Fi access points.
The company has raised more than $1.5 million in seed financing and has begun to pursue an "A" round targeting about $10 million.
iNovo is also looking for "strategic investment from MSOs," Miller said. That's a path he's travelled before. Time Warner Cable Inc. (NYSE: TWC) participated in N2 Broadband's A round and deployed N2's OpenStream, a VoD backoffice system that let operators use video pumps from multiple vendors and played a big role in dropping costs to about $100 per stream from $300 in less than three years.
— Jeff Baumgartner, Site Editor, Light Reading Cable