Google-Motorola deal has implications for cable


Google’s $12.5 billion acquisition of Motorola Mobility is getting a lot of attention just because of its size. It’s believed Google’s main interest is in patents to defend the Android smartphone platform. But there are also important patents which impact the cable TV business.

IMS Research sent RBR-TVBR this analysis of the cable angle:

Google Acquisition of Motorola – Implications for Set-top Boxes Market: IMS Insight
By Stephen Froehlich, Senior Analyst, Consumer Electronics, IMS Research
Yesterday (8/15), Google was considered a great enemy of US cable operators, threatening to take away a large share of TV advertising revenues and flirting with a pay over-the-top TV service of its own. As of this morning, Google has become a “frenemy”, set to become the largest technology supplier to US cable.

It appears that Google has no intent to rebrand Motorola Mobility or intervene in its operations in any direct way. Google really only wants MOTO’s patents so as to defend the Android platform.

Motorola Mobility has continued to operate with a great deal of independence, being a consistent cash generator for the more volatile parts of Motorola’s business. IMS Research’s impression is that it maintained a corporate culture that was quite different from that found at the rest of Motorola – and we expect this to remain the case. But there are some key places where Google could add significant value to Motorola’s pay-TV and home product portfolio.

Content Search & Discovery. Content search and navigation is one of the leading areas of pay-TV technology innovation at the moment. With the exception of Verizon FiOS, Motorola’s pay-TV customers are not known as leaders in this area. Motorola’s set-top boxes already run a flavor of Linux. Changing that to Android would be reasonably straightforward.
Low-cost, energy-efficient data centers. A key opportunity to bring cost savings to cable operators. A modular, containerized head-end based on Google’s own datacenter innovations is a real possibility, making upgrades much more straightforward. This could have implications as far-reaching as the economics of network DVRs.

Cloud-based Multiscreen Services. Google owns the world’s largest over-the-top video service. YouTube and Google TV provide an ideal server platform for cloud-based multiscreen services while Motorola is also a leader in home transcoding for home-based multiscreen service delivery. Combined with the above, it is certainly easy to imagine Motorola offering OTT-in-a-container.

One final note, Sanjay again cited home-mobile convergence as a key opportunity for Motorola Mobility. However, our analysis is that any such convergence must happen through open standards. With the exception of Apple, no one player in either space has enough market-share to support a proprietary solution.