The deal would enable Motorola to build better set-top cable boxes and improve its video on-demand services and infrastructure. Terms were not disclosed.
Motorola said Monday it would purchase the broadband video company BitBand in order to bolster the growing demand for home video services.
BitBand specializes in infrastructure and software to deliver IP TV services, as well as products for on-demand content-delivery networks. Terms of the deal were not disclosed, but the privately-held BitBand had been seeking a $4 to $5 billion acquisition price according to media reports. Motorola said it expects the deal to be finalized by the end of the year.
BitBand would be folded into Motorola's Broadband Home Solutions, which also makes wireless networking equipment and set-top cable boxes. BitBand technology seems to have natural synergies with this business, as it could enable Motorola to build Internet-capable set-top boxes that can take advantage of more video on-demand services.
"Motorola committed to investing in our video infrastructure solutions as our customers evolve their networks to handle the explosion in consumer demand for video," said John Burke, senior VP of Motorola's Home Solutions, in a statement.
The move comes as Motorola is struggling primarily due to the lack of success in its handset division. The company will be relying on the Google-backed Android operating system to turn around this business, and it has just released high-profile smartphones like the Cliq on T-Mobile and the Droid on Verizon Wireless. Motorola still plans to split itself into two independent companies, but it will wait until the global economic climate improves to complete the move.
The deal would allow Motorola to capitalize on BitBand's strong user base in Europe, as well as to grow its infrastructure business in other regions.
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