Google Looks to Shave Off Motorola's Set-Top Box Division, Pocket $1.5-$2.5B USD
December 7, 2012 9:59 AM
comment(s) - last by
Sale would help focus Motorola Mobility on mobility
When Google Inc. (
bought Motorola Mobility
, it was inevitable that big changes were in store. Bleeding cash, but with a lot of interesting assets -- a smartphone business, patents, and a set-top box business -- Google had chosen
quite the fixer-upper
The latter unit (set-top boxes) has been the focus of Google's latest restructuring efforts. Google will reportedly sell the unit, one of the largest producers of set-top boxes, in an auction to either a cable company like Arris Group Inc. (
) or a private equity firm.
The Wall Street Journal
, a pair of sources say the auction could bring in between $1.5B and $2.5B USD for Google. Other potential bidders listed by the
include France's Technicolor SA (
) and the UK's Pace PLC (
The set-top box unit is
currently engaged in a war
with rival TiVo Inc. (
) who produces the eponymous set-top digital video recorder (DVR). Both companies own key patents in the field and they are suing each other, each alleging infringement, in a conflict that mirrors the smartphone market's "patent war".
Motorola Mobility is a top set-top box maker. [Image Source: Kivan Technologies]
The sale of the set-top box unit would allow Google to focus Motorola Mobility exclusively on smartphone objectives. Google has committed to laying off 4,000 Motorola staff globally,
trimming the unit's workforce by 20 percent
. If the set-top box unit sale is expected to represent a "refund" of between 12 and 20 percent of the unit's
$12.5B USD purchase price
, which Google paid last year.
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RE: Bad idea!
12/9/2012 4:16:02 PM
I simply don't understand this.. especially with efforts in Google TV, not to mention the expansive market that could be gained by porting an Android experience over to set top boxes (as long as the cable companies don't mind).
I don't see any sign of set top boxes going away any time soon..
RE: Bad idea!
12/10/2012 11:44:04 AM
I think Google is making the right decision here.
The current cable boxes are designed around the cable companies designs. Basically bare bones units that are inexpensive to produce. If Google tries to push their UI and whatnot, the cable companies won't buy it. After all, Google competes with them for video on demand with the Google Play store. The cable companies would just move to a different producer of cable boxes and Google would be left with a much less desirable division.
As for the patents, I'm sure Google will keep the patents it needs and just license them to the buyer.
RE: Bad idea!
12/10/2012 1:05:47 PM
The problem is, when set top boxes do make their exit I think it will be sudden (or at least the writing on the wall will appear suddently). I suspect Google believes $1.5-2.5B now makes more sense than the profits they might make over the course of a few years (or less) and then being left with a company they can't sell (and the bad PR associated with layoffs).
"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs
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