Cisco Exits Set Top Box Market, Sells Unit For $600 Million

Discussion in 'TiVo Coffee House - TiVo Discussion' started by tarheelblue32, Jul 23, 2015.

  1. tarheelblue32

    tarheelblue32 Well-Known Member

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    http://www.dslreports.com/shownews/Cisco-Exits-Set-Top-Box-Market-Sells-Unit-For-600-Million-134577

    Cisco is getting out of the cable set top business. The company announced today that it will be selling its set top box division to French company Technicolor for around $600 million. According to the Technicolor press release, the deal will give the company a 15% share of the global consumer premises equipment market, shipping 60 million devices per year and an installed base of 290 million set-top-boxes and 185 million gateways in over 100 countries.

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    "Through this acquisition and strategic agreement, Technicolor can immediately bring its unrivalled experience and innovation in video creation, delivery, and display to more customers in more geographies, while strengthening our position as a technology leader," the company said in a statement.

    Cisco is one of several companies that helps build Comcast's X1 set top boxes and is helping the company develop its new "XG2" box. Cisco's also the leading supplier for Charter's HD-DVR 'Worldboxes,' which feature dual IP/QAM capabilities, up to 16 tuners, a DOCSIS 3.0 cable modem, 1 Gig of RAM, high-powered USB to enable future applications, and a terabyte of storage for HD DVR use.

    Cisco's exit of the cable set top box market comes as the industry slowly but surely shifts toward more virtual and cloud-based infrastructure and less physical customer-side equipment.
     
  2. mrizzo80

    mrizzo80 Well-Known Member

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  3. Dan203

    Dan203 Super Moderator Staff Member TCF Club

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    Ouch, that's quite the loss.
     
  4. aaronwt

    aaronwt UHD Addict

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    Did they keep the patents? Were those the reason they paid so much years ago?

    EDIT: This article mentions that they earned $27 billion in revenue from that division over the last ten years.

    http://www.businessinsider.com/new-cisco-ceo-just-fixed-a-costly-mistake-2015-7#ixzz3glTm7jPM

    And when they bought Scientific Atlanta for $6.9 billion that it included the $1.6 billion of cash SA had. So their net price was really $5.3 Billion.
     
    Last edited: Jul 23, 2015
  5. Dan203

    Dan203 Super Moderator Staff Member TCF Club

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    If it's worth $2.7B a year why would they sell it for just $600M?
     
  6. aaronwt

    aaronwt UHD Addict

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    That's why I was wondering about the patents?
     
  7. UCLABB

    UCLABB Well-Known Member

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    Cuz revenue doesn't equal profit.
     
  8. UCLABB

    UCLABB Well-Known Member

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    I have had SAs. The only patent worthwhile was probably stolen from TiVo.
     
  9. CoxInPHX

    CoxInPHX COX Communications

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    This could be bad news for CableCARD support and Cisco Tuning Adapter firmware updates.

    Did Cisco also sell off the NDS acquisition?
    This could mean issues for Cox and their premium Cisco/NDS Contour TV equipment and service.

    All the articles talk about set-top boxes and cable modems, so I assume that Cisco will still be involved in the Cable plant infrastructure business, Yes or No?
     
    Last edited: Jul 23, 2015
  10. Chris Gerhard

    Chris Gerhard Well-Known Member

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    I haven't seen the historic profits for Cisco from the set top division, maybe it was really good the last decade but this sale sure appears to indicate that Cisco doesn't believe the business will be profitable going forward.
     
  11. tenthplanet

    tenthplanet Well-Known Member

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    ATT U-verse boxes have been Cisco also.
     
  12. LoadStar

    LoadStar LOAD"*",8,1

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    Not all. Many (but not all) of the wired boxes (particularly older ones) are Motorola manufactured, but the wireless boxes are all Cisco I believe.
     
  13. Series3Sub

    Series3Sub Well-Known Member

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    This sounds like Cisco is leaving the cable STB business just in time.
     
  14. UCLABB

    UCLABB Well-Known Member

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    I would say they are leaving it way too late based on the selling price.
     
  15. tenthplanet

    tenthplanet Well-Known Member

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    That's what my father has, the wireless ones are all Cisco including the wired that transmits to the others.
     
  16. Johncv

    Johncv Well-Known Member

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  17. UCLABB

    UCLABB Well-Known Member

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  18. aaronwt

    aaronwt UHD Addict

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    So for TiVo it's rather timely then? They should be just about ready by now. :D
     
  19. convergent

    convergent Member

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    That's just what I was thinking!

    I just went through getting my new Tivo working with TWC and talked with the cablecard support guy a bit. I asked about cablecard problems with firmware, and he said that it was more of a problem in other goes that didn't have "all Cisco" gear. In the geo here, there is Cisco gear on the server side, and also Cisco cablecards and he said they had few problems there. It was when they had different gear on the server side that was a problem.

    So hearing "all Cisco" and thens seeing this makes me get nervous. Obviously nothing will change for the worse immediately, but it sounds like trouble. But, I guess it could also get better too if this new owner invests in it. We'll have to wait and see.

    I've been Tivo-less for almost a year and now after having it back for a few days I realize how much I like it better than other STBs. I had weaned myself, and now I'm hooked again! Hope they can survive the twists and turns of the industry.
     

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