Cisco Systems CEO John Chambers told Wall Street analysts that the company "got very lucky that Motorola got purchased by Google" -- which has introduced uncertainty among customers about Motorola Mobility's future -- in announcing quarterly financial results Wednesday that topped expectations.
"There are only two real players that can bring entertainment video in a major way" to pay-TV operators, Chambers said on the company's earnings call. "All of a sudden, you have major service providers saying, 'Cisco, we see you now even more important in terms of the partnership and the direction on it.'"
Google in August announced its offer to acquire Motorola Mobility for $12.5 billion, primarily eyeing its intellectual-property portfolio of more than 17,000 patents to protect the Android operating system from rivals' lawsuits. Google expects the deal, which is subject regulatory approvals, to close by April 2012.
Chambers reiterated that Cisco remains "very much committed" to the cable set-top box market.
However, he added, "it's really the architecture that we're committed to, as this moves into the cloud with our Videoscape capability. Our service providers customers asked us to partner with them as they move from traditional set-top boxes, to IP set-top boxes, to the cloud, which again, is enabled by our Videoscape solutions."
Cisco's service provider video business grew orders in the quarter ended Oct. 29 by 26% year-over-year, to a yearly run rate of approximately $4 billion, while revenues grew about 13%, Chambers said.
The top priority for service providers is mobility, Chambers said. The second area they're focused on is video -- "and boy, that's why we did not leave that set-top box [business]," he said. "I think for anybody that thought we'd leave the set-top boxes, they just didn't understand service providers."
In helping to cable operators migrate to IP video, Chambers pointed to Cisco's $99 million acquisition of BNI Video last month acquisition, which will become part of the company's Videoscape offering.
Overall, Cisco reported sales of $11.3 billion, up 4.7% from the year-earlier period, and net income of $1.8 billion, a 7.9% year-over-year decline.
At the end of first quarter, Cisco had 63,465 employees, a reduction of approximately 8,400 driven by the completion of the sale of the set-top manufacturing facility in Juarez, Mexico, to Foxconn Technology Group as well as layoffs.