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Jim Barthold
Zenith Electronics has departed the cable business, selling its Network Systems division to Motorola for an undisclosed amount of cash.
The sale marks the end of a 20-year Zenith effort to crack cable's closed set-top fraternity, dominated by Motorola and Scientific-Atlanta. Over the years, Zenith developed analog and digital set-top boxes and was a cable modem pioneer. Recently, the company has been divesting itself of those businesses to concentrate on its core TV technologies.
"This is really one of the last pieces in Zenith's efforts to focus totally on consumer electronics as we transform into a technology and marketing company related to consumer electronics," says Zenith spokesman John Taylor.
Formed in 1979, the Zenith division will join Motorola's San Diego-based Satellite & Business Network Systems (SBNS) business unit and will complement Motorola's direct-to-home satellite business, especially in the international market.
"We're buying the direct-to-home assets," says Tom Lynch, SBNS corporate VP/GM. "Zenith has a very solid position, particularly in Latin America, and an emerging position in Asia that complements our product line and our position in North America."
Lynch says Motorola hopes to bolster and leverage Zenith's relationship with News Corp. in Latin American and Asian markets and build on relationships with BellSouth and GTE in the Multichannel Multipoint Distribution Service (MMDS) wireless arena.
That business, though, is subsiding as BellSouth moves into its own direct-to-home satellite service. Motorola could get a piece of that business, which BellSouth expects to expand rapidly throughout the Southeast late next year.
Zenith's employees won't have to move far. Motorola is headquartered in the Chicago suburbs, and Zenith is based in Glenview, Ill. While SBNS is located in San Diego, Lynch says the 100 new Motorola employees would continue in a new location in the Midwest.
Zenith last year became a wholly-owned subsidiary of Korean giant LG Electronics, with a mandate to shed non-consumer-related businesses and concentrate on the emerging digital TV marketplace.
This fall, Zenith will introduce a digital set-top which is a combined DirecTV and terrestrial TV box.
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