Platforms: Set-Top Box Face-Off

Cable set-top boxes traditionally have been outside the realm of integrators' work, mainly sold or leased through service providers. But as Motorola and Cisco's Scientific-Atlanta division each add new capabilities to position their boxes at the center of ambitious connected-home strategies, opportunities for integrators to sell the devices are multiplying quickly.

"In general the next round of product integration, especially when they start getting IP-based, opens up tons of opportunities for us," says Bob Gaetz, president of Littleton, Mass.-based integrator Access Connections. "Yes, it can integrate, but [the customer] can't do it, we have to. The more sophisticated it gets, the better it is for us."

Access Connections is starting to sell set-top boxes and service from DirectTV. Gaetz says there is currently no profit in selling the boxes, but they form an important part of the complete solutions the company provides. The new features that Cisco and Motorola are adding to the boxes, especially networking and remote-management capabilities, will allow integrators to position the boxes at the center of complete home installations and build revenue-rich solutions around them, he says.

Even before it was purchased in November by San Jose, Calif.-based Cisco, Scientific-Atlanta had been beefing up its set-top boxes. At last month's International Consumer Electronics Show in Las Vegas, the No. 2 manufacturer of set-top boxes showed off its MCP-100 with a built-in high-definition DVR and DVD burner. The device also can stream high- or standard-definition video from one room to up to three other rooms via coaxial or CAT 5 cable, says Dave Davies, vice president for strategy and product marketing at Lawrenceville, Ga.-based Scientific-Atlanta.

But it's the anticipated synergies between Scientific-Atlanta's devices and Cisco's networking products that offer the most potential. Through its Linksys division, Cisco offers wireless, VoIP and other products for homes and small businesses. Cisco also has a foothold in other home technologies, through its recent investment in Zensys, the creator of Z-Wave wireless control technology, and the earlier purchase of KISS Technology, a maker of networked entertainment devices. Combined, these devices and other technologies should make Cisco a major player in the home market, especially if it can offer a wide variety of services through Scientific-Atlanta's set-top boxes.

"Because of their Linksys division, they're very well-primed to take on that home networking piece of the puzzle, and come up with solutions to bridge voice, video and data, and other devices in the home," says Michael Arden, principal analyst of residential entertainment technologies at ABI Research. "At some point, people will want to network their appliances, home security, surveillance. That's something that someone like Cisco with its Linksys division and now Scientific-Atlanta could exploit and develop some new technologies for."

Davies also hinted that significant new products are in the pipeline. "There's a lot of opportunity if you look at just the connected home side with Cisco's business in Linksys. They have a tremendous number of products that fit in that category, a tremendous amount of expertise and infrastructure to create the digital home," he says. "As we bridge that with our new digital set-top boxes, we can create a new, engaging experience for the consumer."

One big question mark is the role for integrators.

Cisco hasn't unveiled specific programs for integrators serving the digital home. Davies says that since Scientific-Atlanta sells its set-top boxes directly to cable companies and telcos, it lets them decide whether to use third-party installers. Some integrators say that since cable companies and telcos are very protective of their installations, unless they are prodded by the manufacturer or homeowner, they will be averse to working with integrators.

"Until it becomes an item that I can buy and install, I'm not interested," says Andy Caraballo, owner of ACS Automation, a Colts Neck, N.J., integrator. "And that will not happen. Why would [the cable companies] let someone else in this crazy world install their equipment?"

The simple reason, other integrators and industry observers say, is because the cable companies and other service providers don't have the manpower or skill sets to implement the full networking and entertainment solutions customers are considering.

Motorola, Schaumburg, Ill., is focusing on including integrators in the digital home strategy it's building around its set-top boxes and has been developing support programs.

Bernadette Vernon, director of strategic marketing for Motorola's Connected Home Solutions division, says integrators will be needed to handle the complex integrations that home customers will expect. "You'll see a lot of cable operator installers and telco installers still out there, but in today's economic state, a lot of people are investing a lot of money in home theater systems, from building it out to things they're doing with speakers," she says. "That's not something the [cable and telco] operators are looking to get involved with. They'll want to do the install, but for more sophisticated enhancements, I don't think they'll be doing that."

At CES, Motorola unveiled several set-top boxes, including the QIP6416, which is HD-ready and includes a dual-tuner DVR and recording capabilities. All are network-ready and can stream high- or standard-definition video or audio content to other devices in a home via MoCA technology over coaxial cables or CAT 5. The boxes communicate via Universal Plug and Play and protocols from the Digital Living Networking Alliance. Motorola also will add networking capabilities to its regular set-top boxes and plans an add-on so integrators can network boxes already in the field.

Many telco and cable companies are starting to use set-top boxes from Motorola and Scientific-Atlanta in their new residential IPTV offerings. Integrators expect to get plenty of calls to help them deal with sophisticated installations.

"I don't think [the telcos and cable companies] will be able to provide the individual service that the customer needs. Tell me one person who's happy with the service the phone company provides," Access Connections' Gaetz says. "Whenever a telco goes out, that's what they do, they do the one thing. If you need something else that goes along with that one thing, they can't do it. We can deal with anything."