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Comcast Picks Motorola for Switched Digital Video

10/25/2007 8:45 AM Eastern

Comcast has selected Motorola as a supplier for switched digital video, Motorola president and chief operating officer Greg Brown said on an earnings conference call with analysts Thursday.

A Motorola spokeswoman said no additional information on the Comcast deal was available.

Comcast has been testing switched digital video systems in two locations, Denver and New Jersey, over the past several months. The company expects to use Arris' edge quadrature amplitude modulation as part of its SDV deployments.

 Switched digital video delivers linear TV channels only when a subscriber requests them, allowing operators to deliver more programming in less bandwidth assuming not every channel being switched will be viewed at any given time.

Brown, in discussing Motorola's third-quarter results, also highlighted video-encoder wins with HBO and Starz Entertainment

The company's Home and Networks Mobility unit, which encompasses set-tops, cable and other video products, had revenue of $2.4 billion, up 6% versus last year, while operating margins declined to 6.9% versus 10.2% last year. Sales for the unit were down 7% compared with the second quarter 2007.

Sales in the home business segment, which includes set-tops, declined sequentially, to $950 million. Brown said operating margins were "under severe pressure due to the acceleration of purchases in Q1 and Q2 due to the U.S. FCC mandate on separable security." He added, however, that sales in the home segment increased 18% year-over-year reflecting growing demand for high-definition and video-on-demand products.

Brown said Motorola shipped 2.7 million digital-entertainment devices in the quarter. Of those, 40% were high-definition digital video recorder models, and 25% were IPTV units.

Overall, Motorola's net income fell 94% from the year-ago quarter because of continuing weakness in its core cell phone business. Revenue declined to $8.8 billion for the third quarter, compared with $10.6 billion in the year-ago period.