Motorola Mobility Holdings, Inc. (MMI), one of the leading set-top box manufacturers, will deliver its highly integrated series of VIP22n2E set-top boxes to Russian telecommunication provider VimpelCom Ltd. (VIP).
VimpelCom, a leading integrated telecommunication services provider that operates under the brand Beeline and one of the major clients of Motorola Mobility, will offer the advanced version of set-top boxes to its IPTV subscribers.
Motorola Mobility’s VIP2202 and VIP2262 set-top boxes, which belong to the series VIP22n2E, offer highly interactive television services like multi-room functionality, on-demand movie, HD video recording and Internet browsing via TV to its customers.
Motorola Mobility came into existence after the spin-off from its parent company Motorola Inc. on January 4, 2011. The company’s home division business is exhibiting signs of improvement based on higher DVR set-top box shipments. Moreover, we believe that the growing popularity of smart TV will further increase the demand for set-top boxes going forward.
Recently, Google Inc. (GOOG) entered into an agreement with Motorola Mobility to acquire the latter for $12.5 billion, subject to regulatory approvals.
Presently, Motorola Mobility holds rights for approximately 24,000 patents, which Google is mainly eyeing. Moreover, the company is one of the leaders in the set-top box category, which makes it extremely attractive for Google, which is aggressively rolling out the next generation smart TV option called GoogleTV.
However, lack of product differentiations coupled with stiff competition from other cheap smartphone makers will act as headwinds for the stock going forward.
We, thus, maintain our long-term Neutral recommendation for Motorola Mobility Holdings Inc. Currently, Motorola Mobility Holdings Inc. has a Zacks#3 Rank, implying a short-term Hold rating on the stock.
