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French media and entertainment technology specialist Technicolor hopes to find a partner for its loss-making set-top box business this year and is in talks with several parties, its chief executive Frederic Rose told Reuters. The company is also seeking to dispose of its French set-top box (STB) factory – where a planned production shutdown threatens 350 jobs – by the summer.
“We are in informal discussions with several players today,” he said, adding that there was only room for three major companies in the set-top box sector instead of the existing five or six with at least a billion euros in sales. Rose admitted that “fifty per cent of something successful is better than 100 per cent of something small.”
The STB market looks set for consolidation. The New York Post reported early March that Google was trying to sell Motorola Mobility’s STB unit that it will acquire once the $12.5 billion acquisition is completed. The report also suggested that Technicolor and UK-based Pace were considering similar disposals, with anticipated Internet-connected TV services from the likes of Google and Apple, and STB functionality increasingly located in the cloud, removing much of the need for viewers to own an STB. Motorola, which has been losing market share to players such as Pace, tried unsuccessfully to sell the business in 2009 for $4.5 billion.
“Our problem is simple: prices have to come down, our clients stress this. Today, we cannot afford to build set-top boxes in France. This battle is lost, let us concentrate on what we can win,” Rose admitted. Talks with potential buyers for the factory should conclude before the summer, he added.
Separately, Technicolor has confirmed that it reached the milestone of five million STBs delivered to Tata Sky, India’s leading satellite operator with 6.5 million subscribers. This long-standing customer also awarded Technicolor a major contract for High Definition (HD) STBs, with shipment scheduled to start later in 2012. The win is in addition to a contract signed in 2011 for the supply of Standard Definition MPEG4 set-top boxes.