General

Moto IPTV

Size matters. Don't let anyone tell you different. Experience too. Good software doesn't hurt either.

by Gerry Blackwell [December 11, 2008]

Motorola, a highly diversified communications technology company with $36.6 billion in sales in 2007, vaulted to the top of the IPTV market in a matter of months.

Motorola makes IPTV set-top boxes—nine different models at last count—and sells them all over the world, including to AT&T for its U-verse service.

The STB
It builds other components in the IPTV ecosystem as well—MPEG2 and MPEG4 head end encoders, DSL network access equipment (modems, gateways)—and provides fiber access network services. But set-top boxes are the main focus.

"Encoders are infrastructure products that are used in one location and shared among hundreds of thousands or millions of subscribers," notes Marty Stein, senior marketing director in Motorola's IP video solutions group.

"For the service provider, the set top is by far the largest expenditure in his network deployment. So that's our flagship."

And the company sells a ton of them. In September 2007, it announced it had sold its two millionth IPTV set top. That was just five months after shipping the first. It recently passed the five million mark.

Stein says Multimedia Research Inc. (MRG) has ranked Motorola number one in IPTV set-top box (STB) sales worldwide. The company has about 25 percent of the global market, he believes.

This may not sound like such a commanding lead, but as Stein points out, about 65 companies are vying for a piece of the action, including major competitors such as Cisco Systems Inc. and Royal Philips Electronics N.V.

"The IP set top market is pretty wide open. There aren't a lot of technological barriers to entry—although there are certainly practical barriers. There are a lot of vendors out there."

It's little wonder. According to MRG, the IPTV industry will continue to grow fairly spectacularly. In its IPTV Global Forecast—2008 to 2012, the research and consulting firm predicted the IPTV subscriber base would increase from 20.4 million in 2008 to 89.1 million in 2012, a compound annual growth rate (CAGR) of 45 percent.

And every one of those subscribers needs at least one STB.

MRG also forecasts that service provider revenues will grow by 50 percent a year during that period. Motorola supplies about 20 service providers in Europe, another 20 or so in North America, approximately ten in Asia-Pacific and a few in Latin America as well.

Some also use Motorola infrastructure equipment, but more use only the STBs. And then there are about 100 service providers, in North America alone—a few IPTV but more cable and satellite—that use just the head end infrastructure gear.

Software
Part of the secret of Motorola's IPTV success, Stein says, is software. For many of its U.S. customers, including AT&T, it builds STBs with Microsoft software. But in 2006, the company acquired its own IPTV software platform.

It purchased Kreatel Communications, a Swedish company with a complete Linux-based IPTV solution, including applications, middleware and set-top box designs featuring embedded Linux.

"The primary thing Kreatel gave us was a complete software environment—one that already ran on European-friendly [i.e. Linux-based] hardware," Stein explains. "Secondarily, but also very important, Kreatel already had a footprint in the European market, which was a fair to growing portion of the [global] IPTV market at the time."

So Motorola inherited a European customer base, and from the Kreatel technology built KreaTV, an application development environment that is now one of the company's key competitive advantages.

KreaTV makes it easy for service providers and their software developer partners to create new applications that will work on the Motorola STB platform.

"It's about time to market and the quality of the user experience," Stein says. "That's the advantage we can provide with our set top platform combined with the KreaTV software."

KreaTV made it easier, for example, for service providers to add interfaces for internet services such as Flickr, the photo sharing site, and Pandora, an online music service. Subscribers can stream Pandora music to a home entertainment system through their IPTV STB or view Flickr photos on their TV screen.

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