Cable Operators

Deal Tunes In Cable Boxes

9/14/2010 1:08 AM Eastern

A new player is looking
to fuel the cable industry’s move
toward multi-tuner, DOCSIS-enabled
set-top boxes -- and
to give chase to dominant chip
supplier Broadcom.
Zoran, a supplier of integrated
circuits for consumer electronics,
raised its profi le in the
set-top box and cable-modem
market last week by announcing
plans to acquire silicon tuner
maker Microtune in a deal
worth about $166 million.

The deal is part of Zoran’s strategy
to become a complete provider
of solutions for consumer home
entertainment devices. “The acquisition
of Microtune is a logical
and strategic move for Zoran,
as it will immediately strengthen
our position in the set-top box
market where we’ve been intensifying
our focus,” Zoran CEO Levy
Gerzberg said on a call with analysts
last week.

Microtune’s customers include
Arris, Cisco Systems, Motorola,
Panasonic, Samsung and TiVo.
After it becomes part of Zoran,
the company will be renamed the
Broadband Receiver Group.

Zoran develops chips for a variety
of digital entertainment and
imaging markets. The company expects
Microtune’s RF tuner silicon
and system-on-a-chip products to
let it provide a more complete solution
to customers — and help
them reduce time-to-market and
gain price-performance efficiencies
for future generations of cable
set-top boxes.
For Microtune, this may have
been the best possible exit.

The company had “actively explored
a broad range of strategic
alternatives” over the last several
months before its board reached
the agreement with Zoran, according
to CEO James Fontaine.

On the analyst call Fontaine
was asked whether Microtune’s
relationship with Intel would
change, given Intel’s acquisition
last month of Texas Instruments’
cable-modem chip set business.
He replied that Intel and Microtune
still needed to work together
to compete against the only significant competitor in the DOCSIS
3.0 space: Broadcom.
“It makes good partners when
you have a common enemy,” he
said.

Fontaine also noted that Microtune
has seen a boost in
sales in 2010, projecting sales
will be up 30% over last year’s
$74.6 million.

According to Zoran, in addition
to beefi ng up its presence in digital
cable set-tops, the deal will
strengthen its position in digital
TV as the market moves to singlechip
TV tuners over the next several
years.

The boards of both companies
have approved the transaction,
which is expected to close around
mid-November 2010.

Under the agreement, Zoran
will pay $2.92 in cash for each
share of Microtune’s common
stock, resulting in a transaction
price of approximately $166 million,
or $84 million net of cash
acquired.

QUICK HITS
CableLabs Certifies Six DOCSIS 3.0
Gateways and Cable Modems

LOUISVILLE, COLO. — CableLabs
certified six additional customer
premises devices for DOCSIS 3.0,
the cable industry’s next-generation
broadband specification, in
Certification Wave 76 last month.

The products are: Arris’
Touchstone Telephony Gateway
TG852G; Cisco Systems’ DPQ3925
wireless residential gateway;
Motorola’s SBV6240 SurfBoard
voice modem; Netgear’s
CG3000X wireless residential
gateway; SMC’s SMCD3CMB
cable modem; and Technicolor’s
DHG576 gateway.

BlackArrow, NDS Demonstrate
Local DVR Ad Swapping

AMSTERDAM — BlackArrow
previewed a DVR ad-substitution
system with NDS, with the
ability to dynamically insert
targeted, local ads in live or
on-demand video, at the IBC
conference here.

The demo was the first public
product showcase jointly presented
by the two companies,
following NDS’s investment into
BlackArrow this spring. Other
BlackArrow backers include
Comcast, Cisco Systems and
Intel.

BlackArrow showed different
scenarios demonstrating
advertisements inserted locally
on DVRs. The demo used Black-
Arrow’s Advanced Advertising
System for managing advertising
sales, targeting and decisionmaking
and NDS Dynamic to target,
deliver, insert and measure
advertisements for both linear
and on-demand DVR-based addressable
advertising.

September