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Arris CEO: Motorola Brand Will Stick Around For Awhile

ATLANTA – SCTE Cable-Tec Expo 2013 -- Following the advice of retail partners and some reconsideration of its own, Arris has negotiated a deal with Google that will allow the company to continue to use the Motorola brand on cable modems and other consumer-facing devices sold at retail for an additional two years, Arris chairman and CEO Bob Stanzione said here in an interview.

Following its acquisition of Motorola Home in April, Arris had one year to phase out the Motorola brand. At the time, Arris anticipated completing that process ahead of schedule. Arris has since rethought that idea, and has made no plans to completely phase out the Motorola label in retail products. Google still holds a 7.7 percent stake in Arris, but does not have a board seat at the broadband vendor.

“We’ve negotiated an extension of that one year deal,” Stanzione said. Moving forward, Arris plans to start co-branding products at retail.

“We’re working with the retailers…to make that transition as efficiently as we can,” he added. “We’ll absolutely stay in retail. I think retail is a business we ought to grow because I think a lot of these in home devices are going to end up being self-install and we want to have a retail presence.”

Outside of the branding piece, Stanzione said Arris’s integration of Motorola Home is “nearly complete on all of the customer facing aspects of the business.” That includes the combined sales forces as well as the merging of product roadmaps and dealing with product overlaps. Arris won’t kill off support of overlapping product lines that customers still use, but it did shut down a next-gen Converged Cable Access Platform (CCAP) under development at Motorola, opting instead to move forward with the E6000, Arris’s CCAP-pointing chassis.

“The work to be done is actually behind the curtain, and that is the IT infrastructure of the company. We’re having to build that. We’re not as efficient as we could be,” he added, estimating that this portion of the integration will take another six to nine months to wrap up.

During the earlier phase of the integration, Arris laid off about 500 employees, or 6.8%, trimming down to about 6,500 as it looked to create $100 million to $125 million in annual synergies from the Motorola Home acquisition.

Stanzione doesn’t foresee any more cuts. “I think we’re where we need to be; I’ve told the employees that,” he said. “One of the things you have to do with an integration is you have to move as quickly as you possibly can so everybody knows what his or her job is and what the outlook for that position is. Otherwise you lose efficiency, you lose productivity with people wondering what’s going to happen. It’s human nature.”

Stanzione has also been making the rounds as Arris becomes a more diversified, global company. Stanzione said he spent the last month travelling to Europe, the Far East and Latin America to get a better fix on those markets and to visit with new customers that came out of the Motorola Home deal. “The cable companies outside the U.S. know about Arris, but a lot of the telcos don’t,” he said.

Cable Prediction: A Return To Video Growth

He also thinks cable’s move to IP video and cloud-based services will help MSOs reestablish growth in video. “I think we’re at the brink of sort of a breakthrough,” Stanzione said, noting that today’s tech  trends remind him of the 1990s, when cable pursued high-speed data and phone services, and then followed with HDTV rollouts.

A new class of boxes and gateways, linked with to a cloud infrastructure will “spur growth in the industry,” he predicted.

He also dispelled the argument that cable’s shift to the cloud will lobotomize the devices in the home, pointing out that the computing power of today’s boxes are ten times what they were five years ago, and are now capable of supporting console-quality gaming and video conferencing applications.  

“This whole notion that the device in the home is getting dumbed down and everything is going to the cloud is not right,” Stanzione said. “It’s not happening that way. Both the intelligence in the cloud in terms of content is exploding, but the intelligence and the computing capacity in the home is growing at a fairly rapid pace.”