Cisco got into the set-top business in a big way with its purchase of Scientific-Atlanta 10 years ago; since then, the set-top market has been consolidating and continues to do so. Today's CPE division sale reflects that reality, and also a growing industry shift from hardware to software and cloud-based technologies. In the press release about the deal, Cisco Chairman and CEO John Chambers wrote, in part, "We are prioritizing our investments to deliver on our strategy of video in the cloud, and will partner with Technicolor to position the CPE business and employees for future success."
In a similar vein, at INTX in Chicago in May, Cisco reps said the company's then-new cBR-8 CCAP box would probably be its last hardware version as the company is shifting to cloud and software for future iterations.
Back to the acquisition deal, Technicolor and Cisco are also partnering on video and broadband technologies, with cooperation on Internet of Things (IoT) solutions and services, and have signed a long-term patent cross-licensing agreement.
The addition of Cisco's set-top portfolio is expected to make Technicolor one of the world's largest CPE providers, with approximately 15% market share worldwide and about 60 million devices shipped each year. ARRIS (NASDAQ:ARRS) is the largest, at 22% to 25% global market share, depending on whom you ask. The post-acquisition Technicolor's combined global installed base would be about 290 million set-tops and185 million gateways in more than 100 countries. The deal provides for ongoing commitment to all existing customers.
