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Cable TV Set-Top Boxes: The Real Motive Behind the Motorola Acquisition?

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Various smartphone and general technology blogs and sites out there have explored the various implications of what Google’s announced $12.5 billion of Motorola Mobility may mean to the Android ecosystem from the smartphone and tablet perspective, but a key–and perhaps a growing arena–area that has not yet been talked much about is Motorola’s experience and deals with cable companies to produce set-top boxes in the living room. As I see it, this may be the key for Google as the company tries to grow its Google TV offerings in light of stiff competition, low adoption and high return rates, and renewed passion to beat Apple’s own project Apple TV box to control everything from computers to phones to the living room.

After Motorola had split up its company into two businesses–a government and enterprise division and Motorola Mobility, which houses the smartphone and cable box businesses–the cable TV offering has been the lesser talked about product of the company’s Mobility division. However, it’s stable business and relationships with carriers may give Google the most value as in the consumer-facing aspect of the company’s effort to invade your life and make things digital.

While Motorola’s patent portfolio and vast pending patent submissions will give Google some legal credibility with its Android operating system, the aspect of the deal has little to do with gaining more consumer market share. Nor is Google’s attempt at creating hardware with its wholly-owned Motorola Mobility division once the acquisition goes through. The real new ground that Google will gain is through Motorola’s set-top box division as a platform in which to coerce cable companies and leverage its Google TV platform on top of.

The deal may not only make it easier for Google to enter the content arena to provide content to smartphones and tablets running the Android platform, but will give Google TV the same boost that HP is trying to inject into webOS by promising that every shipped computer and printer in the future will come with webOS pre-loaded. With the Android OS on Google TV pre-loaded onto every single Motorola set-top box, Google will quickly be able to gain market share and not have to worry about creating yet another piece of hardware for the living room. Additionally, Google TV, with future third-party app support, can pave way for Google to remove Sony, Microsoft, and Nintendo from the living room gaming hub.

As it stands, there are rumors that Apple TV’s progress in gaining market share may be stuck, unless Apple enters the hardware TV market and pre-loads Apple TV as a smart component of HDTV sets in the future. However, the plan there, compared with Google pre-loading Google TV’s software on Motorola cable boxes, would not be as cost-effective for consumer adoption. As TV refresh cycles in the home are not as frequent as upgrading to a new smartphone, and replacing an entire TV is expensive, Google’s entrance into the living room through the Motorola acquisition may be easier. Additionally, the cost for adoption of Google TV will be relatively cheap for consumers as they’d pay a few bucks a month to their cable company to rent their cable box, which Google TV is loaded on.

The value is enormous for Google if it can leverage Motorola’s relationship with cable companies to make a push for Google TV. But before that happens, Google still needs to woo more developers and to allow developers to create compelling third-party content for the Google TV platform, which itself is based on Android so shouldn’t be that hard to do.

Microsoft had tried to enter the living room before through its media boxes, but that attempt wasn’t all too successful. Apple calls its Apple TV a ‘hobby’ still. And with high return rates behind various third-party boxes for Google TV, we had thought this push for a united digital living room would not be successful, but along came Motorola…

Tech enthusiast in Silicon Valley enjoying the possibilities of ubiquitous connectivity, information sharing, and collaboration enabled by mobile broadband. You can contact Chuong on Twitter @chuongvision or search +chuongvision on Google+.

5 Comments

  1. Anonymous

    08/16/2011 at 3:19 pm

    excellent story

  2. Anonymous

    08/17/2011 at 5:10 am

    It’s an interesting idea, though I doubt cable companies would adopt a google TV box for a few reasons.
    1. Would be the increased cost of complexity to support infrastructure.
    Cable boxes are uniformly more dumbed-down with every major software release it seems to me, and I think this is mainly to streamline support costs.  It dont’ matter so much that many are wholly unsatisfied with the product because the cable companies have been very successful at dragging their feet to a geological pace in the face of government insistence on their providing openings for competition in set-top boxes, etc…

    2. Would be that it affords a lot of capability which the cable companies are not gonna let go by for free or cheap.  If their customers have access to that much capability the typical cable-company route is that they must pay for it each and every month.  Hell, look how successful they are at getting people to pay extra every month for wireless router functionality.

    However, if google used motorla’s capability to build a private set-top box which had tuners and DVR capability and used android/google-tv then that could be a big hit.
    Tivo might patent-fight them out of that space too though.

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