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