Not Much Change Seen in Arris Purchase of Motorola Mobility’s Home Division
Arris’s agreement to buy Motorola Mobility’s home division from Google probably won’t change Motorola’s policy positions much or have much effect on their cable operator customers, industry officials said Thursday. Arris and Google announced Wednesday night that Arris agreed to buy the home division, which includes its cable set-top box and network equipment businesses, for about $2.35 billion in cash and stock. The deal also includes about 1,000 patents as well as perpetual license agreements for other Motorola Mobility patents, executives said during a teleconference Wednesday.
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The combination of Arris, which mostly sells broadband equipment to cable operators, and Motorola, a major supplier of conditional access and set-top boxes to pay-TV operators, probably won’t change the policy positions Motorola has historically taken on FCC issues, a cable attorney said. “I can’t see it changing anything,” the attorney said. “They're still the same company."
But there is some hope among cable technology executives that new management at Motorola could lead to changes in the way it does business, said Steve Effros, a cable industry attorney and consultant. “Motorola in the old days was so dominant and so strong and had no hesitation in flaunting that dominance in terms of their pricing and everything else,” Effros said. “Maybe with this new management, who had experienced some of that angst when they were on the other side of table from Motorola, will act a little differently."
The deal includes a provision that will limit Arris’s liability in pending patent infringement litigation with TiVo, executives said Wednesday. “Google and Motorola are running the case,” said Bob Stanzione, Arris’s CEO. “We're going to help them … as we are asked. But the exposure to Arris is a very low number,” he said. “It’s not something to worry about in terms of the financial impact on Arris."
The transaction precedes an expected wave of spending by cable operators on consumer premises equipment, Stanzione said. “There’s an aging installed base of set-tops out there,” he said. “They're going to be wearing out over time and have to be replaced and there’s going to be an evolution toward a new generation of set-tops” that are hybrid IP-video and traditional MPEG video-capable, he said. “Every operator I talk to tells me that in-home devices are not going to go away.”