Motorola has entered into global reseller deal with Irish downloadable conditional access systems (DCAS) vendor Latens, following similar announced deals with Verimatrix and Widevine. The agreement covers the complete range of Latens conditional access (CA) and middleware products for IPTV, DTT, Cable and Satellite TV. Latens DCAS and Motorola set-top boxes (STBS) have already been integrated in deployments with (among others) Du in the UAE and iVisjon in Denmark as well as with Norway's Lyse where Laten's EcoSystem middleware has also been deployed. Like Latens, Verimatrix and Widevine are primarily deployed in IPTV and have DVB DCAS products, however only Latens is currently deployed to DVB networks.
Although Motorola supplies almost all of the hardware required to construct end-to-end IPTV services it does not have its own CA or middleware solutions for IPTV. Motorola's success at selling products into the IPTV space depends largely upon its ability to integrate its products with proprietary CA and middleware offerings. Reseller agreements such as these should yield a deeper level of product integration reducing costs and time to market helping Motorola to win hardware deals.
Primarily through deals with AT&T and Verizon, Motorola are currently the market leaders in IPTV STBs and these agreements with Latens, Verimatrix and Widevine will help maintain this position. Shipments of IPTV STBs integrating Latens, Verimatrix and Widevine CA will total 3.5m units between 2009 and 2012. The deal with Latens also includes resale of its middleware product. Motorola have already signed a similar deal with IPTV middleware vendor Espial giving it access to Espial's recently purchased Kassena middleware as well. Coupled with Motorola's experience integrating Microsoft's market leading Mediaroom middleware these reseller deals will allow Motorola to establish an impressive integration platform.
Motorola has not so far used its position manufacturing IPTV hardware to act as a systems integrator in the same way that it did with digital cable. This role has been left to other companies such as Alcatel-Lucent, Ericsson and Nokia-Siemens. Despite the strength its integration platform Motorola may have missed the boat as an IPTV systems integrator, since all tier one telcos in developed markets have already deployed IPTV services. However, having this strong integration platform will enable Motorola to compete with existing hardware suppliers as IPTV providers upgrade services. For example, Motorola has recently won a contract to supply second generation STBs for BT's BT Vision IPTV service through its experience integrating Mediaroom. Latens CA currently protects about 1.1% of the global installed base of IPTV STBs. Given that Motorola IPTV STBs are the most widely deployed Latens could see a significantly increased market share if Motorola was to promote its CAS and middleware resale partners.
Motorola's key market is in the US having shared a duopoly of the US cable STB and CA market with Scientific Atlanta (now owned by Cisco) since the digitisation of the networks began. The Federal Communications Commission has sought to end this duopoly by banning cable operators from deploying STBs with integrated CA components. Cablelabs' FCC-backed separable CA solution, Cablecard, has proved unpopular with cable operators because it is difficult and expensive to implement. Many US cable operators have been looking for an alternative separable solution often citing DCAS as the way forward. DCAS could save US cable operators upwards of $40 per STB which amounts to a huge saving considering that there are a further 70m analogue cable TVs to convert in the US. Comcast, Cox and Time Warner Cable (TWC) have begun their own DCAS project, Polycipher, which has yet to be trialed or deployed. Latens has already deployed DCAS in DVB cable networks with Poland's Multimedia Polska and India's Digicable and the deal with Motorola could be a huge opportunity to extend this. Verimatrix and Widevine have also launched DCAS products for traditional broadcast systems but have not announced deployments. Cisco has yet to announce any similar DCAS or middleware reseller deals.