Motorola Inc. and General Instrument Corp.'s new
technological reach and brand clout should hasten broadband convergence, executives said
after the companies merged.
GI shareholders approved the company's $17 billion
merger with Motorola -- the last hurdle to closing the deal -- so GI is now a wholly owned
subsidiary of Motorola.
It will now be called the Broadband Communications
Sector, headed by former GI CEO Ed Breen.
Motorola chairman Christopher Galvin will continue in that
Motorola proposed buying General Instrument in September in
an all-stock deal in which GI shareholders would receive 0.575 shares of Motorola stock
for every GI share they own.
Breen said the combination will bring GI a greater depth of
technology -- especially in telephony and data -- as well as global reach and brand
"This merger is a growth story," Breen said.
Breen was particularly high on the new company's
opportunities in streaming media and telephony.
"Streaming video is actually a big opportunity for the
industry if they take advantage of it," Breen said. "The quality of streaming
video is very impressive. Because now we have high-speed data on the TV, it's an
interesting business proposition for cable operators. I see a lot of that product being
able to be programmed and controlled through our digital set-top."
In addition to the well-recognized Motorola brand -- which
should especially help the new unit as it attempts to sell cable modems and digital
set-top boxes through retail channels -- Breen said the merger also allows the former GI
to round out its broadband-communications offerings. The company also expects to be at the
forefront when Internet-protocol [IP] telephony becomes available in 2001.
"We get to finish off the convergence of
broadband," Breen said. "We bring to bear a leadership position across all three
platforms -- video, voice and data."
And as cable operators upgrade their plant, the newly
merged company will have greater high-speed Internet and digital cable opportunities.
"The industry is in a mass rebuild scenario,"
Breen said. "You need plant in a rebuilt state to take advantage of high-speed data
play. The opportunity for us will get intriguing in the area of how we market this
product. We can lead in doing that, but clearly in partnership with cable operators."