Google is set to get out of the TV set-top box business it will be inheriting from Motorola Mobility before the 12.5 billion deal even closes. The deal is somewhat counter to what Google CEO Larry Page may have had many believing when he suggested the Motorola business would play a role in his plans to revolutionize the living room. And Google isn’t alone in wanting to get out of the TV set-top box business. Cisco is seeking to sell Scientific Atlanta which has had a near duopoly on the set-top box business with Motorola.
The clunky cable box is viewed by many as an obstacle to a newer generation of devices and software that can integrate television and the Web. One set-top box executive said, “Software is the value, not the hardware.” Some executives believe the box will shrink but not go away completely. One executive in the business added, “Boxes will get thinner because more intelligence will be in the cloud, but you’ll still need a gateway to the home.”
While still probably too early to know for sure, Google is highly likely to sell off the business. The main reason is because cable operators have shunned buying boxes from Motorola prior to Google’s purchase. As a result, Motorola has been losing share ever since trying to sell the business for $4.5 billion in 2009. It doesn’t help either that Apple TV and Roku have been stealing the show. The price tag is expected to be even lower with many in the business speculating a sale in the range of $2.5 billion to $4 billion.