Motorola maneuvers for converged future: Merger with GI creates unified broadband division

With its acquisition of set-top box maker General Instrument finally complete, Motorola has gathered its broadband product lines - cable routers, modems, cable telephony products and now set-top boxes - under one umbrella to position itself for the future convergence of communications.

The new Motorola Broadband Communications sector will provide solutions for the broadband access marketplace, said Motorola Chairman and CEO Christopher Galvin. "Those are the big growth opportunities moving forward - bandwidth, the Internet and wireless all brought together in the home."

"This is a growth story," said former GI Chairman and CEO Edward Breen, who now will head the new Motorola broadband division. "We're not just slapping these companies together for cost synergies."

Adding GI's strengths in set-top technology and network management to Motorola's expertise in wireless communications and data transmission will help the company develop products for wireline and wireless home networking, Breen said. "Not only will video, voice and data converge on the broadband cable platform, but there's an interesting opportunity to integrate wired and wireless technology for the same customer."

The merger also should speed the effort to manage all IP systems in the home from a single platform. An enhancement probably will be added to the current platform, which lets cable operators manage video and interactive TV via GI's latest DCT-5000 set-top, downloading new software after the box has been placed in the home.

Apart from the technological depth, the combination brings each company a required asset for succeeding in the evolving cable market. GI gets a brand name that's well-known in the home and will help it enter the coming world of retail modem sales. And with GI's DCT set-top line, Motorola gets a cable modem with data over cable service interface specifications certification - something its own units have failed to achieve.

"It gets them over the certification hurdle," said George Stamos, an analyst with Broadband Associates. "That's an automatic ticket to sell to [multiple systems operators] who want interoperable product - in other words, all of them."