- Automotive & Transport
- Building Technologies
- Business Process Solutions
- Communications & Wireless
- Computer & Office Equipment
- Consumer Electronics
- Financial & ID Technologies
- Industrial Automation
- Intelligent Video
- Lighting & LEDs
- Medical (InMedica)
- Power & Energy
- Security & Fire
IMS Research Analyst Blog
Cisco to buy NDS and Sell STB Manufacturing?
Date: 15 March 2012
Stephen Froehlich, Senior Analyst, CE Group
Value creation in pay-TV distribution is shifting from CPE to software. Cisco is not alone in thinking this as Pace is making a similar shift from hardware-based solutions to its Elements software platform on a range of STBs.
Cisco has strong head-end and network solutions, but any user of a Cisco set-top box will not have kind things to say about their STB software. NDS is perhaps the perfect complement to Cisco’s Videoscape strategy, being the premiere creator of set-top box software solutions. The combined company would provide security for an estimated 30% of all active set-top boxes that support encryption.
However, with the exception of Cisco and Motorola, conditional access (CA) businesses generally operate separately from set-top box businesses. The reason is that operators want to have multiple set-top box vendors but are resigned to having single security vendors and software vendors. North American cable is the only major exception to this rule.
Therefore, it may now make sense for Cisco to sell its set-top box and broadband gateway manufacturing unit while retaining its PowerKEY conditional access system and a few other pieces of Scientific Atlanta that are integral to the Videoscape strategy. To take any other path might threaten the value of the existing NDS business.
I would note that the need to spin-off the set-top box business is not nearly as strong as it is in the Google acquisition of Motorola; it is probably manageable. However, the combined business would have some conflicts of interest with customers that weren’t there before.
It should also be noted that no Cisco STB (or PowerKEY) customer except Cablevision is also a major NDS customer.
Recent Consumer Electronics Postings
- 19th September 2012 - IFA 2012 - Move over 3D… Here comes 4K TVs
- 27th June 2012 - Telcos Take On the Home Automation Market
- 15th March 2012 - Cisco to buy NDS and Sell STB Manufacturing?
- 13th March 2012 - Digital Signage Notes from DSE 2012
- 22nd February 2012 - Sony PS Vita Review and Analysis