ARRIS to Buy Digeo
ARRIS announced its agreement to purchase Digeo, a company known for its Moxi
digital video recorders (DVRs), for a cash
purchase price of approximately $20 million.
Microsoft co-founder Paul Allen founded
Digeo in 1999. Steve Perlman, founder of
Web TV, launched Moxi in 2000. The two
companies merged in 2002, with Digeo at
the time working closely with Motorola on
what was then called a broadband media
center (BMC).
The deal expands ARRIS’s reach in the
customer premises equipment (CPE) and
consumer electronics (CE) space.
Admittedly not a consumer brand, ARRIS
is nonetheless in many more homes than
ten-year-old Digeo, which targeted a relatively small market segment with its high-end Moxi DVRs. “Nearly 500,000 shipped
to date, ” Digeo CEO Greg Gudorf said in a
conference call announcing the deal.
In January 2009, ARRIS announced that it
had shipped 20 million embedded multimedia terminal adapters (eMTAs) worldwide.
According to Digeo, it has delivered
Moxi products to eight cable operators,
including Comcast and Time Warner Cable.
In May 2008, Charter Communications,
also financially backed by
Paul Allen, agreed to deploy
the Moxi 3012 HD-DVR. In
October 2008, Bend Broadband announced its plan to
do the same.
One goal of this deal is
bring Digeo’s products and
intellectual property into more
homes. “(This acquisition)
will lead to a broader adoption of the concepts developed by the Digeo team, ” Bruce
McLelland, ARRIS president, broadband
communications systems said.
“We plan to continue to market these
(Digeo) products, ” McClelland said. “These
technologies will also be combined with
ARRIS voice and data gateways.”
ARRIS is getting software along with the
Digeo boxes.
‘The power of IP’
After failing to launch a retail product in
early 2008 as planned, Digeo picked up
the pace, introducing its cable-friendly
3012 HD-DVR in October 2008, the
consumer-ready HD-DVR at CES in January 2009 and smaller multi-room Moxi
Mate in August 2009.
The industry’s interest in video gateways
dovetails with the broader shift toward IP-centric CE-devices.
Digeo has long positioned their Moxi
boxes as hubs of home entertainment that
bridge the gap between the television and
Internet worlds. Gudorf said ARRIS shared
that vision.
“ARRIS really gets the power of IP in the
network, ” Gudorf said.
The acquisition brings into ARRIS’s portfolio a Kirkland, Washington-based facility and
75 employees. It raises the company’s research and development investment by $3
million per quarter, increasing the company’s
total by 10 percent. In his presentation, McClelland said ARRIS invests $110 million in
R&D annually. “We look forward to expanding our investment, ” he said.
Wi-Fi Rules the Home
Home network technologies such as
coax and powerline are making inroads
in connecting consumer electronics (CE) devices, but a report from
ABI Research indicates that wireless
connections will remain the dominant
technology.
According to ABI’s study “Home Networking and Digital Home Network Market Analysis,” connected CE devices are
frequently scattered around the home,
away from the router, making wired connections impractical. As a result, Wi-Fi
connections in CE devices will rise from
113 million in 2008 to more than 285
million by 2012.
“While many consumer electronics devices initially adopted Ethernet connections due to cost and potential wireless
connectivity issues, Wi-Fi has become
the dominant LAN connection type in
several device categories,” says digital
home practice director Jason Blackwell.
“Now we’re seeing Wi-Fi making its
way more aggressively into components
including digital televisions.”
802.11n approved
As bandwidth-intensive applications have
become more commonplace, Wi-Fi has
evolved with higher speed technologies,
such as 802.11n, capable of delivering up
to 300 Mbps or higher.
In September, the IEEE approved the
802.11n amendment to the base WiFi
standard. The first draft had been submitted in 2003. The 560-page final document should accelerate the deployment
of WLANS that deliver 10 times greater
data rates than previously defined.
ABI predicts that Ethernet will remain
a strong second-place technology, as it is
often integrated in the silicon and does
not add a significant amount to the bill
of materials costs. Over time, powerline,
coax, and high-speed wireless connections will show growth in adoption,
especially among service providers.
