Pace is the world’s largest supplier of set-top box technology, having taken the top spot from rival Motorola a year or so ago. A story in Investors Chronicle also suggests that Pace’s market share could be threatened by the Google purchase. This past week has seen Pace’s FTSE London-listed share price recover somewhat from 92p to a ‘high’ of 110p, but August 18 saw it fall back to 99p on the back of the Investors Chronicle story and not helped by a bad day on the stock market generally. Monday (August 22) saw a welcome momentary recovery (to 98) during the day before falling back to 94p, but as an indication of Pace’s fall from shareholder grace the current price levels are a long way from the year’s ‘high’ of 231p and the damaging profit warnings earlier this year.
Nevertheless, Pace is in a strong position in North America with major contracts in place with the likes of Comcast and DirecTV, as well as a growing client base around the world. The Investors Chronicle piece said: “Google’s attempts to crack in to the lucrative pay TV market through its Google TV service have so far proved unsuccessful, but this deal could be its golden ticket, especially since Motorola is the second largest STB provider in the US, with just under a third of all digital pay TV households in North America using its cable systems.”
What is not yet clear is Google’s strategy once the deal with Motorola closes (later this winter), and whether it will mean Motorola exiting completely from its set-top box market – and instead sees Google focus on integrating its Google TV offerings as widely as possible. However, the signs are that Google wants to develop its new STB acquisition “by driving innovation”.
Either way Google TV is seen as a potential threat to the established pay-TV businesses around the world – many of which are Pace’s clients.